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Facebook Rejects $1.62 Billion Yahoo Offer

  • TechCrunch, Wednesday, December 13, 2006 11:04 AM

For the past few years, Facebook, the social network for students, has enjoyed surging traffic among a coveted user base, making it one of the most sought after Web properties for big media corporations today. Started by former Harvard student Michael Zuckerberg, Facebook grew from a $10 million valuation by Friendster in 2004, to a $1 billion acquisition attempt by Web giant Yahoo earlier this year, which Zuckerberg and the company's board roundly rejected.

TechCrunch received leak documents that tell the whole story. Yahoo initially offered $37.5 million for 5% of the company at the beginning of this year. After that was rejected, Yahoo came back with a $1 billion offer for a complete buyout.

That number comes from revenue projections of $608 million in 2009, growing to $969 million in 2010, where it would remain at levels near $1 billion annually through 2015. However, Facebook's actual 2006 revenue appears to be closer to $50 million in revenue, or nearly $1 million per week. These projections, by the way, assume that Facebook grows to 48 million users by 2010, out of a total high school and young adult population of 83 million. TechCrunch says Yahoo was prepared to offer up to $1.62 billion, but negotiations broke off before that offer could be made.

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