• BusinessWeek.com, Wednesday, November 1, 2006 12:45 PM

What happened to Facebook? A month ago, it seemed a foregone conclusion that Mike Zuckerberg, the social network's 22-year-old creator, would sell the Web site he created two years ago with the help of two of his Harvard classmates. Now, after being linked with Viacom and Yahoo, Facebook is having problems keeping its users.

In March, Zuckerberg told BusinessWeek.com he was hoping to net $2 billion for the Palo Alto-based company. Well, no one was biting at that price, but Yahoo was willing to shell out $800 million for the site late this summer, and Zuckerberg could have personally walked away with several hundred million dollars. "We begged him to take the money, if not from us, then from someone," an anonymous source told BusinessWeek.com.

But now, the signs indicate that Facebook may no longer be as "cool" as it once was among college students, its core user-base. Traffic is declining. According to rating service comScore Networks, Facebook's number of uniques dropped 10% to 13.3 million at the end of September from an August high of 14.8 million. Recent moves to ramp up traffic and ad dollars have only served to upset users. As a result, potential buyers are now content to sit on the sidelines and wait for the site's price to drop.

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