Facebook-Mark-Zuckerberg

9 Big Companies that tried to buy Facebook within its first 3 years

Facebook is the most widely used online social platform with over 1.5 billion active users. Launched back on 4th February 2004, the platform has marked great achievements in just over a decade. Started with just a site for Harvard students, it has now the largest social network. When it was just at its initials stage, several companies tried to buy Facebook offering lucrative rates. CEO and Founder of Facebook Mark Zuckerberg turned all the offers down.

David Kirkpatrick, the author of The Facebook Effect book, has lifted some details from the inside of the company. Here are the companies that tried to acquire Facebook at great prices:

Unnamed financier in June 2004:

It was when Facebook was just four months old. 20-year old Mark Zuckerberg got a $10 million offer from an unnamed New York financier. He did not even consider this offer for a minute.

Friendster:

One earlier bidder of Facebook was its rival Friendster. Before the deal enters final rounds, Facebook got big on its own and the deal never happened.

Google in 2004 summer and in Fall 2007:

Google also tried to acquire Facebook at the start of summer 2004. The executives visited Mark Zuckerberg aiming to partner with or acquire Facebook. Later in Fall 2007, Google’s top salesman Tim Armstrong convinced the company to let him pursue the deal with Facebook. Google never got the deal despite of its offer to invest $15 billion that will completely reshape the site.

Viacom in March 2005 then in Fall 2005 and finally in 2006:

In March 2005, Viacom i.e. a US based global mass media company offered $75 million to buy the company. Facebook did not show any interest in the offer. Viacom continued its efforts throughout the year. CEO Viacom Tom Freston pitched all possible synergies between the two firms to Mark Zuckerberg in a meeting in late 2005. Mark does not show any interest and eventually, there was a big NO.

Still, Viacom did not gave up its efforts. In early 2006, MTV boss Michael Wolf had a meeting with Mark Zuckerberg. Zuckerberg told him he thought the company was worth $2 billion. Couple of weeks later, Viacom sent Facebook a $1.5 billion offer – $800 million in cash upfront and the rest for a later payout. This time, Mark showed interest and asked for a larger upfront payment. Viacom was not sure to pay more for a company with small revenues. Ultimately, the deal felt apart and Facebook remained unsold.

MySpace in 2005 spring:

Before being sold to News Corp, MySpace i.e. another rival firm came to Mark Zuckerberg in the spring of 2005. Mark with his team guys met with MySpace executives but only to learn the company’s values.

NBC in 2005:

NBC i.e. American commercial broadcast TV and radio company tried apparently tried to acquire Facebook in 2005. The NBC executives stopped by for a peek. The book has not got any further detail on this meeting.

News Corp in January 2006,

In January 2006, the parent company of MySpace i.e. News Corp had got same plans. The company’s boss Ross Levinsohn with his top adviser visited Mark Zuckerberg in Los Angeles. Ross was of the view that Facebook might not maintain its growth. Mark Zuckerberg turned their offer by saying, ‘We built this to last’.

Yahoo in June 2006 and in Fall 2006:

Yahoo decided to offer Facebook $1 billion in the summer of 2006. Many of Facebook investors and executives were willing to sell. However, Mark had different plans. At that time, Facebook was about to launch News Feed. Mark was of the view that it would make the company’s value more than a $1 billion. After horrible 2nd quarter earnings in 2006, Yahoo lowered its offer to $800 million. Facebook rejected this lowered offer within 10 minutes.

In the fall of 2006, Yahoo came again to Facebook and offered $1 billion or more. At that time, Facebook had opened the site to all people other than college and school students. As reported in the book, the site was having 20,000 to 50,000 daily signups. Despite of interest of few Facebook investors and executives, the deal was ultimately rejected.

AOL in mid of 2006:

AOL i.e. an American multinational mass media company tried to buy Facebook in 2006. CEO AOL Jonathan Miller met with its parent company Time Warner executives. He urged them to sell IPC and AOL would sell MapQuest and Tegic. Together, they would offer a deal of $1 billion plus. Time Warner CEO Jeff Bewkes rejected the proposal.

Microsoft in 2007:

Microsoft had also the same plans to completely acquire Facebook in 2007. Rather than complete acquisition, CEO Microsoft Steve Ballmer was eager to acquire a small stake in Facebook for $15 billion valuation. Microsoft would have an option to buy 5% more share in the company after every six months. If lived by it, Microsoft would be able to completely acquire the platform in 5 to 7 years. Facebook was not interested in this proposal. However, Microsoft did acquire 1.6 percent of Facebook for $250 million later on.

If ever Facebook desires to get sold, it will be to Microsoft or to a company with package that even Microsoft can’t match.

This article has originally published in Business Insider.

Post Author: Taha Munir