Deals, facebook, mark zuckerberg, microsoft, social networks

Facebook now worth $15 billion?

The Wall Street Journal is reporting that Facebook is negotiating with Microsoft to sell a stake in the hot social network at a valuation between $10 billion and $15 billion. That would net Mark Zuckerberg's company between $300 million and $500 million in cash, without Zuckerberg having to surrender any meaningful control over the company; the stake would represent 5 percent or less of Facebook. What's not clear is why a deal's happening now, save to lock in a stratospheric valuation. Some time ago, a Facebook insider called Zuckerberg "a crazy kid" for not selling. And we've said Facebook's valuation claims seemed a bit puffed-up. But given that suitors' offering prices have rocketed tenfold since then, Zuckerberg doesn't seem that crazy anymore. Instead, it's Microsoft executives, driven mad by Google and MySpace envy and determined not to miss out on the social-networking trend, who seem, well, a bit off.

12:13 PM on Mon Sep 24 2007
By Owen Thomas
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12 comments

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Ted Dziuba at 12:25 PM on 09/24/07
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at this rate, facebook should be able to buy google in 5 years.
mandarin at 12:30 PM on 09/24/07
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Wow so all you need is a social networking website and you can feed all of Africa with the proceeds......
Patricia2 at 01:16 PM on 09/24/07
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I think it's overhyped and overrated. But, that's just me. I wouldn't be surprised to see it sell for a lot, but more because the market is that sort of ignorant, not because I think FB is necessarily worth it.
pepelicious at 01:29 PM on 09/24/07
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The shittier the US economic forecast, the higher Facebook's valuation. I know we all have pretty short memories, but Google's will-timed IPO took a bit of the steam out of the last downturn we had. That much money going from an 'old intnernet' company to a hot web 2.0 biz could be the thing that keeps everyone feeling confident and spending money. Especially the lucky bastards at facebook.
sample032 at 01:31 PM on 09/24/07
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40 million users, $15 billion valuation. Yes, there's room for growth, but $375 per user is a little high.

Let's say they had myspace "numbers," 100 million "users." That's $150 per user.

So let me get this straight. Facebook users (myself included) sell our digital souls (real world personal information) for free webhosting, and Facebook will in-turn sell them for $375?

Something's not right, here.
Elainiac at 03:01 PM on 09/24/07
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I just hope that if Mark Zuckerberg sells a piece of Facebook for 15 billion that he buys a sports team (or two) Mark Cuban style. I also want him to make comments like Mark 1.0 does on how Broadcast.com was the original YouTube.
lavista4u at 06:41 AM on 09/25/07
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WOW...What a hype...I think America is just Hype now a days and can't face the compitition with ASIA what with iPhone and now this Facebook crap.

Its just numbers to attract more HYPE...nearly 90% of the users are college folks..with no money in hand...what are they going to do in facebook....when you are in college..friendship and love seems very good..but when you enter the real world..you will forget all your friends..How many real friends do bill gates and steve jobs have or any CEO has....

Networking is all good when you are a kid with no money...BUT once you become successful with loads of money..HELL you won't share it even with your parents
zionvier at 09:06 AM on 09/25/07
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I'm seeing some basic math here that's not adding up:
"$300 million and $500 million in cash"
"the stake would represent 5 percent or less"
"valuation between $10 billion and $15 billion"

ok, here it goes.. taking the HIGHEST numbers:
$500 Million / .05 = $10 Billion
Lowest numbers:
$300 Million / .05 = $6 Billion

So, where did $15 Billion come from?
sample032 at 10:51 AM on 09/25/07
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@zionvier: You left out the valleywag factor. It varies based on story and what they need to make headlines look better.
Owen Thomas at 11:50 AM on 09/25/07
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@zionvier: Come now, don't be ridiculous. You're ignoring, for rhetoric's sake, the "or less," without which your mathematical critique utterly fails. I suspect what we see here is simply a vagueness on the part of the Journal's sources -- the stake is clearly less than 5 percent, but no one's saying exactly how much less.
gtycoon at 04:18 PM on 09/25/07
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Why not buy $4,000 script and spend 100 million in advertising and create a rival social network? Why buy something about to peak? Not to mention possible lawsuit by Friendster once they start enforcing social network Patent.....
zionvier at 01:50 PM on 02/26/08
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It's been a while, not sure why I returned here actually, but just for more math, I'll lay this out. OT, you're right, I did leave out the 'or less' so we'll do it this way....

To reach $15 Billion you would need these numbers:
$500 Million / .0333 = $15 Billion
$300 Million / .02 = $15 Billion

So it would go to say it would be somewhere near 2% to 3-1/3%, to me that's a good amount off of 5%. Split the difference and get 2-2/3%, around half of 5%, so I'd think they should think more and get a little closer to the real percentages, not just make up "5% or less", technically it's correct, but misleading since it's not near 5%.