Who Will Buy Facebook? (and why TC thinks Google is a possibility) • Hacker News Board

Re: Who Will Buy Facebook? (and why TC thinks Google is a possibility)

#11

Post by nostrademons » Mon, May 21, 2007, 3:54 PM UTC

natrius wrote: post #9

danw wrote: post #7

I think facebook are in it for the long haul, might even do an ipo and be almost google sized themselves

They'll probably IPO, but there's no way they'll be Google-sized. Google is basically a money printing machine because the dominated the most monetizable activity on the internet: searching. People are looking for things to click on when they search, so if an ad comes up with something that's similar to what they're looking for, the click on it. On Facebook, people are looking for information about other people and g…

Remember, though, that nobody thought search was monetizable when Google dominated it. They didn't have a business model until almost 2 years in: at the time, the fad was to turn search engines into "portals" and cash in through banner advertising on the home page.

FaceBook also has the advantage of being locally-based: ads can be targetted very specifically to people within range of local businesses. People don't really search for restaurants within walking distance, and even if they did, Google doesn't know where they're located. Facebook does, however, and can display ads for local businesses that the user might not be looking for now but might want to visit later.

Re: Who Will Buy Facebook? (and why TC thinks Google is a possibility)

#12

Post by aston » Mon, May 21, 2007, 4:31 PM UTC

far33d wrote: post #10

aston wrote: post #8

Earlier quoted context omitted.

I don't think Google can afford a $6 billion buyout. They're on track to make maybe $16 billion this year. Microsoft is probably the only software company with a decent interest in the web and the pocketbook to pay for a highly valued site. And the aQuantive buy is the biggest they've ever done (and probably will ever do).

This is (sort of) a misunderstanding of how most buyouts work. Google, were they to "acquire" facebook for $6B would almost certainly structure it as a stock-swap merger. This way the acquisition isn't a taxable event, and they can use stock instead of cash. At GOOG's current market cap, $6B of dilution would be pretty minimal. Not mention the $10B of cash equivalents (and growing, fast) on their balance sheet to buy…

I suppose I was using "afford" somewhat loosely. I still think $6 billion would be a huge amount for Google to drop in one place, stock or (especially) otherwise.

Re: Who Will Buy Facebook? (and why TC thinks Google is a possibility)

#13

Post by orlick » Mon, May 21, 2007, 7:12 PM UTC

natrius wrote: post #9

danw wrote: post #7

I think facebook are in it for the long haul, might even do an ipo and be almost google sized themselves

They'll probably IPO, but there's no way they'll be Google-sized. Google is basically a money printing machine because the dominated the most monetizable activity on the internet: searching. People are looking for things to click on when they search, so if an ad comes up with something that's similar to what they're looking for, the click on it. On Facebook, people are looking for information about other people and g…

... maybe in a few years we will all say:

"Facebook dominated the most monetizable activity on the internet: connecting people together"