Yahoo to Acquire Facebook?
The WSJ is reporting that Yahoo will acquire social networking site Facebook for roughly $1 billion.
Facebook has been the subject of a number of rumors this year, most notably Microsoft and Viacom, among others. Following Murdoch's acquisition of MySpace, Facebook has been among the most attractive sites out there (with much fewer legal headaches than YouTube).
If the deal happens, it will be interesting to see what Yahoo does with it. One of the attractions for users of Facebook has been its exclusivity. Until recently, it was only available to students with a college email address. Then it was rolled out to high school students and now to the public. Just as Groucho Marx didn't want to belong to any club that would have him as a member, you could see users revolt as the velvet rope is opened to the masses.
On the positive side, with Flickr and Delicious in the fold, Yahoo is clearly pursuing the social networking arena. These tools could be very useful to the facebook community, encouraging users to share information with their network.
This proposed deal is interesting, particularly in light of Yahoo's announcement this week that it expects to be at the low range of its revenue projections, due to slowdowns in advertising. On one hand, diversifying their revenue base could be a positive. Conversely, Yahoo management probably should be focusing on fixing the problems with the Panama search release and on their core PPM business.
For more thoughts on Yahoo, read Michael Parekh, Fred Wilson and Rafat Ali, who reports that CEO Mark Zuckerberg has no interest in selling right now.
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