Facebook was set up by Zuckerberg as a way for friends at Harvard University to meet each other and network about social events, in much the same way that Shawn Fanning set up Napster to help friends at university swap music. But while Shawn got tied up in lawsuits from the RIAA and his company eventually went bankrupt, Mark and his college pals — who dropped out to work on Facebook from a rooming house in Silicon Valley, according to this great piece in the Harvard Crimson — stand to become extremely wealthy. It is a private company, but Facebook appears to only have about five major stakeholders (although it has done a couple of funding rounds with VCs).
And who would pay a ridiculous sum of money like that for a university social network? Well, media giant News Corp. paid close to $1-billion for MySpace.com, which is a similar social networking site populated largely by teens sharing information on which bands they like. According to comScore MediaMetrix, Facebook.com is the seventh-most heavily trafficked site on the Internet, with more than 5 billion page views in February — more than Amazon.com, Ask.com or Disney.
It’s reasonable to assume, as Businessweek does, that Facebook.com would likely interest any media giant that wants to compete with News Corp. — and that includes Viacom, another media conglomerate run by a 70-year-old billionaire (Sumner Redstone). Young consumers are living online, and big media companies want to reach them where they live. And Mark Zuckerberg might soon be able to live pretty much wherever he wants to, instead of sharing a flat with a bunch of college buddies.
For what it’s worth, Rafat Ali over at paidcontent.org – which has a great track record on this kind of thing – says that Facebook has been on the block for awhile, and that everyone including Viacom has looked at it, and that the $2-billion figure is “at best, hearsay, and at worst media manipulation.” But Carlo at Techdirt points out that many people (including me, I confess) said similar things about Skype, and look what happened there. Om Malik says that they should have sold out for $750-million because they are slipping in popularity (Markus from plentyoffish.com makes some good points in his comment on my post)