The reason FaceBook turned down $1 Billion.....
 

Just got my FastCompany mag today...

The kid said by 2010 with 48 million users they will be making $969 Million and they are in it for the long haul....

OMG.....good for him.

$2 my final offer (dollars)

Because after all the publicity he got by declining the deal he can sell it for $1.1 billion.

lol, yea and then watch that facebook shit fall right off the map eventually...

man
 

1 word, fuck me - amazing sorry and best article ive read for years.

what an idiot 1 billion is more than 969 million AND he wouldnt have to wait another three yrs and take a chance of it losing value or being topped by something else.

what a dumb ass, unless he is doing like you tube guys did and holding out for a bigger offer but his intention is to try to make it higher from a competitor of the original offerer.

NO way he can be dumb enough to take a chance otherwise, is there ?

Guess he's throwing the dice, and betting on black.

Time will tell if he's a genius, or an idiot.

:2 cents:

yeah sure $1 billion is more then $969 million, but the question is, would you rather have $1 billion now, or $969 million in 3 years, and then even more the year after that, and even more the year after that?

Id rather take 1 billion now and collect intrest off that in the bank when facebook can take a shit over night and be worth nothing in a matter of days.

those sites arent really that stable. and how the fuck is it worth more than myspace? you would think myspace would have sold for way more.

That was a great article. Really inspirational.

He should have took it while he can.

well I should be so lucky to have to make that decison LOL......

But to answear your question, I would definatly take the money in hand. wouldnt even need to think about more than 5 mins for that kind of offer. :thumbsup

facebook will only be big until the next thing comes along, pretty foolish but i bet the guy will sell within the year for more.

its worth more than myspace because myspace isn't user friendly

the coding of Myspace sucks

Facebook has a huge backing from universities, our uiversity actualy advised in their newsletter that students join facebook!

he does right, a wise investment.

He should sell off 10% so he has $100mil to play around with for the next few years, and a bit of change left if the bubble bursts and the company goes bust.

That's provided that the net stays as it is for that long...

Anything could happen in 3 years that could change lots of things..
All it would take is someone that pops up with something similar, yet quite unique to pull the bottom out from under the guy...

Not a chance I'd wanna take... Turning down a billion bucks for a website seems to me to be some strange greed thing.. And I'd hate to think it's some, "Hey this is cool.. Let's see if we can get more!" kind of game...

oh it all makes sense now... not.

$1 Billion + 2 1/2 years interest - work > $969 million + 0 interest + still working.

theres the income from the site per year, as well as its net worth

if it was a billion cash not bullshit stock , then i would of took it and run

just the interest on 1B would be more that 90% of people make in a year :X he should have taken the money. At least I know I would have...

honestly...here's what I think:

Anyone who w/ startup experience can relate to what I'm about to say....

With any business; you make a business plan with the intention of making money...duh right?

Well, the journey of going from writing up that business plan, to putting it in action, to actually reaching your goals is more than you can ever anticipate. The highest highs and the lowest lows. By the time you reach your goals there feels like there is almost a genetic link between you and that business. You still have all these amazing ideas that you want to see come to fruition. And then at some point nearly every successful business owner ends up facing a decision to sell their business. At first you think to yourself "finally all the hard work is going to pay off". And then you actually think about how that would no longer be a part of your life.

I first faced this decision when I was only 16 years old and was contacted by the snowball networks about my network of video game review sites. I took the offer which was only in the high 5 figures but to a 16 year old it sounded pretty good at the time. Over the next 4 years I saw my network converted to a different business model and eventually a redirect to the IGN sites.

Lets face it; he would walk away with more money than he could ever spend from this offer. He's either a) a moron b) Does have bigger plans on the horizon that he believes in. If so, good for him for pursuing those goals c) He can't let go of his baby

My :2 cents:

If it's his first major business (and obviously being valued in the $1b region it's now seriously major) then I can understand that he wouldn't want to let it go. In a previous life I was in another service industry and kept my business open for at least a year after the profits went -ve... I spent so much time on it that I couldn't bring myself to close it. Incidentally, if I hadn't fallen into adult I wouldn't have been able to pay off the debts that I closed with relatively quickly.

Good on them! Hope they make enough to beat the $2 billion.

A billion if Im right is 1000 Millions

true dat:2 cents:

Good read so far.. anyone know how much http://www.fiveacross.com/home.html script sells for? It was listed in this article as the company cisco bought.

There is a one word answer for the question posed in the thread title:

GREED

thats a lot of money here. lol

1 million usd = 49 million philippine peso :1orglaugh :1orglaugh

He is stupid, that site can die off overnight and he will be left with nothing and crying tha the didnt take the billion from Yahoo

He's is utterly retarded. He could take the money and use 500 million to ensure that all his future generations will never have to work again.

He could use the other 500 million as VC - he could end up being involved in 3, 4 or 10 facebook-sized deals.

That's how billionainres become mega-billionaires.

Im starting to see the same delusional behavior over this whole web 2.0 thing as there was during the initial dot com boom. People who don't cash in huge when they can will go down hard.

I've used facebook for a long time, great site and as the article says I think people underestimate it. Consider it's target market is college/high school students and that alone is worth more than myspace who targets everyone and sucks at it.

surely with that logic, why on earth would anyone want to buy it? :1orglaugh :1orglaugh

somehow i think the buyers have a better understanding than the voyeurs do.

hes hardly stupid and I doubt he has made the decision purely on his own without any guidance.

Providing it lasts.

Like on of my mentors says to me all the time, its better to take the money off the table, then wait for a "What If"

I would've sold

Well... most people do pay taxes on their income. :Oh crap

I don't understand the appeal of Facebook :( It bores me. And it makes me angry that I have to use a school email to login...I never use my school email and I can't ever remember what it is! :)

If he's lucky it may grow and become the next Friendster.

sorry, I changed my mind. I am no more selling it.

Interesting story.

I would have sold. The internet community is precarious, fickle, and ever evolving. One day a company is king, the next it's in the waste basket and a new empire is on top.

But their commitment to growing the site is also noble and interesting, and it could work. Furthermore, once a site has the value that Facebook does, they too, can choose to expand their own empire, just as companies like Google have. They can sell to companies like Google and Yahoo, or they can focus on their product and also buy up other smaller valuable sites.

There seems to be a belief out there that once a site becomes popular it should sell out to a larger empire like Google. Well, why not be the next Google by buying out other sites, instead of selling out to empires like Google.

There are so many ways to think about it.

Loads of factors there :winkwink:

He is not going to actually get a billion in his hands - it's a corp and, how knows, it may earn more or not.

One thing that is prob secure right now is that he won't be exactly short of sufficient funds to live either way.

A lot of things could happen in 3 years especially with the social networking sites, their core group of users are very trendy. If something hot and new pops up it could cut into his projections big time.


I have no idea what they making RIGHT NOW, but for a site like that I would sell for 3x what I am making a year right now. I wouldn't try to forcast what I will be making 3 years from now as a basis. If it makes 100 million a year right now and you offered me 300 or more I would take it. If you offered me 200 million i would pass. I doubt that site is making more than 100 million so 1 billion would be a great deal for him to cash in. But what do i know. :winkwink:

now if he was making some of that income from rebilling memberships + ads I would sell for 4 - 5 years income.

it's all about the traffic IMO. Google has a lock on traffic. It would be very hard for a site like facebook or myspace (if they would have tried to go this route) to compete with the googles who already have such a firm foothold.

It's not impossible, but would be very hard, and risky.

if you are not going to sell out then you better grow your ass off to keep your edge. If you sit idle you will be gone. If you don't sell to google they will buy out on of your smaller competitors sooner or later and with googles existing traffic network they will likely surpass you.

You touched on a very key part, leverage and diversifing. You are right. He could take 500 million and tie it up in mutual funds and have billions guraranteed in a couple years, growing more and more each year. He wouldn't have to lift a finger to make that money.

Take the other half and spread it out over new internet startups, realestate developements, etc.. realestate would be pretty much a lock, unless he was a moron and did something really stupid. For the startups, if just one of them makes it big you can do it all over again.... You would be working you way to Bill Gates money in no time :winkwink:

or you say. no i will pass i can make that much in 3 years for now.

Lets see how they are doing when google, and a bunch of other big billion dollar corperations start buying up his competitors and he gets squeezed big time.

Just read the article

The site is "on track" to bring in 100 million this year. How much of that is PROFIT

IMO even if he makes his 3 year goal which I think is way over optimistic because it does not factor google and others buying up his competitors and cutting into his "future" share of the market he is banking on. Even if he comes close to his projections, it might still take 5+ years for him to come close to PROFITING 1 Billion.

insaine to pass this up. I would bet he doesn't come close to making 1 billion when this is all said in done. Only if he sells it. It wont happen from income generated from the site (profit).

The guy has had one hell of an achievement. but his past shows he does not have have a lot of experience with stuff like this. Ex hacker, hits it big with a site, 22 year old kid. I wouldn't say " well he must know what he is doing". I am sure he is getting advised but I would help the people advising him don't benefit from him keeping it :winkwink: Lots of snakes in the grass.

This will be interesting to watch.

Not to mention, you site gets hacked (the irony since he was a hacker) or you have a major programming error, something happens to piss people off and they leave by the thousands, etc... watch the value of yoru site tank over night. Especially when google and others will be gunning for your ass.

Well if your making 100 million a year and with current growth rates your looking at say 200 million next year. So i would predict that a worst case scenario is around 500 million total. But potentially you could make 20 billion or so over the lifetime of the site (maybe more!). So basically its a choice between 1 billion guaranteed or a range of 500 million to 20 billion dollars. Since even if something hotter comes along in 5 years you will still make good bank i think its a pretty good gamble. Myspace was bought at a steal price and was one of the best buy in history.