'Facebook Is Not for Sale'
“Facebook is not for sale,” said Jim Breyer flatly. I had called the Accel Partners hotshot venture capitalist, who is on the board of the social-networking site and a big investor, to ask about a variety of rumblings I had been hearing of late about the big Net company’s acquisition plans.
Facebook is an obvious candidate for such purchases, having been a company of interest to many, including Yahoo, Viacom’s MTV unit and many others. The Palo Alto, Calif.-based company, founded by Mark Zuckerberg, was almost sold to Yahoo for $1 billion, until those talks collapsed last year. Since then, its growth has spiked even more, as the company has rolled out more features and also opened the service up to other members beyond the college set. It now has 21 million active users, up from 6.5 million a year ago.
So I lobbed a call to Breyer (pictured here from his just-a-regular-guy-pose profile on Facebook) to check. Usually, the most one can expect to get on the record is a typical “We don’t comment on speculation,” but Breyer was unequivocal and for attribution about the next steps for Facebook. “Our efforts at opening up registration and adding new features for customers have given us significant momentum and broadened engagement,” said Breyer. “We are intending to build something substantial as an independent stand-alone company.”
Breyer would not speculate about the prospect of an initial public offering, but did note that Facebook was “experimenting with different ways to monetize the site.” That pretty much means ads and sponsorships, no matter how much more hip and interactive they might be on Facebook, and that will be tough going. Facebook has a cushion in its exclusive, three-year banner ad deal with Microsoft signed last summer. The agreement came quickly after Google locked down the larger social networking site MySpace, and it guarantees Facebook millions in revenue annually. Still, it can’t rest on this nice payoff and must drastically expand its revenue sources over time.
One way it could do that, to my mind, is to open up its system to allow third parties to develop on the platform, creating all sorts of new communities linked to Facebook, which the company would never have time or manpower to develop. Unlike the messier MySpace, Facebook has a cleaner and easier-to-customize interface and is much more, as Zuckerberg once described it to me, “utilitarian.” I would call it useful and more relevant than other competitors, and a white-label version would likely be a hit. There are lots of smaller companies out there attempting to offer this, but all would be hard-pressed to compete with Facebook’s expertise and network.