Wall Street analysts are telling Yahoo they should acquire Facebook. Coincidentally, reports say that Yahoo (along with Viacom) are indeed interested in Facebook, at a purchase price in the $1 billion range.
Is this a better or worse deal than acquiring Geocities for billions?
It's hard to evaluate all those past acquisitions. I'm most comfortable in evaluating what I know about: the Overture deal. Where would Yahoo be now without that revenue, in spite of the huge lag in upgrading the platform? That deal was great. Most of the other acquisitions are much harder to evaluate.
It's interesting to note we're watching essentially the same game as we've been watching for 6-8 years: portals acquiring "users." It's just that today, users of some of these services are much more embedded and entrenched than some of those old acquisitions. A greeting card user (remember: Excite - Blue Mountain - huge sum - now-dead portal) isn't a "user" at all. A member of Facebook, for now at least, is a relatively embedded, recurring member.
Posted by Andrew Goodman
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