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Social networking site for sale: US $2bn


A report on BusinessWeek's excellent website says that Facebook, a social networking site founded two years ago for college students in the US has knocked back an offer of US $750 million and is holding out for a US $2 billion.

Likelihood is that they are looking to Viacom to cough up, as that company is reported to be desperate to catch up with News Corp following Murdoch's purchase last year of myspace.com for what would now look like the bargain price of US $500 million.

The article, by .Steve Rosenbush goes on to map out the significance of the service in cold hard stats:

That may sound like a huge amount of money, especially when you consider that the company was launched just two years ago by a group of sophomores at Harvard University, led by Mark Zuckerberg (see BW Online, "Under 30, On the Cutting Edge"). But already, www.facebook.com has become the seventh-most heavily trafficked site on the Internet, according to market researcher comScore Media Metrix. It racked up 5.5 billion page views during the month of February, the latest month for which complete data are available. That's more page views than the Web sites of Amazon.

The article also includes a fresh batch of stunning stats about myspace.com:

MySpace has continued to grow since the acquisition. It had 37.3 million unique visitors during the month of February, according to comScore. It logged 23.5 billion page views, making it the second-most trafficked site after Yahoo, which had 30 billion. MSN (MSFT) was No. 3, with 18 billion, and Google (GOOG) was No. 6, with 7.7 billion. News Corp. also acquired gaming and men's lifestyle site ign.com for $650 million (see BW Online, 08/22/05, "IGN Entertainment: Where the Boys Are").

Much as I am convinced by the power of social media, sprialling valuations for such new companies do make me nervous. I know that these media giants have learned their lessons, I hope they have, but my heart still sinks at even the prospect of another bubble.

There's plenty of debate out there on blogs, as you would imagine.

(Disclosure: I have colleagues that consult for News Corp companies but I do not. This post is based personal opinion of the article cited and not any other briefing or privileged information.)

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