Facebook Confirms $25M Investment
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After talk of a $750 million buyout offer, Facebook today settled instead for a mere $25 million investment from venture-capital firm Greylock Partners.
The companies announced today Facebook's third round of funding.
The $25 million is nowhere near Facebook's rumored $2 billion price tag, but spokeswoman Melanie Dietch said Facebook did not plan to sell anyway.
"We've had offers to purchase the company," she told internetnews.com. "It's not something we're looking to do. We've always been focused on building this company for the long term."
Rumors of Facebook's pending acquisition began shortly after News Corp. bought MySpace.com for $580 million last summer.
But when the press reported that Facebook rejected a $750 million offer and set their price at $2 billion, some scoffed as if those numbers were absurd.
Greylock general partner David Sze said those figures never surprised him.
"I don't know anything about the details, but I can put two and two together. They are the seventh most popular site on the Internet," Sze told internetnews.com.
"I don't think there is a single site in the top 10 that isn't a public company or isn't part of a public company [that wasn't] bought at very high prices and is now part of a public company."
What's more, Sze said, is that not only is Facebook a popular form of new media, it's popular with the crowd old media covets: 18-to-24-year-old Web-savvy consumers.
Sze described the attributes of youth with cash and why Facebook's lock on that crowd compelled him to invest.
"It's a market where individuals are coming into their own and making their own decisions as to who they want to be, what they want to buy, what they want to do, " Sze said. "It's the time in the life where people are the wealthiest. They don't have a family to support."
Youth with cash will draw more interest to Facebook, Sze admitted.
And until media ceases to covet that magic combination in its consumers, skeptics would be wise to rest their rolling eyes.
Million-dollar investments and billion dollar rumors are only likely to continue.