Video: Profiting via social networking

updated 9/21/2006 9:26:43 PM ET 2006-09-22T01:26:43

Social-networking Web site is in serious talks to sell itself to Internet media company Yahoo Inc. for an amount that could approach $1 billion, The Wall Street Journal reported on Thursday.

Facebook, which has been at the center of takeover rumors for months, also held separate discussions with Microsoft Corp., the world’s largest software maker, and media conglomerate Viacom over the past year, the Journal reported, citing people familiar with the matter.

(MSNBC is a Microsoft-NBC joint venture.)

In March, BusinessWeek reported that the company had turned down a $750 million offer and hoped to fetch as much as $2 billion in a sale. It has been separately reported that Viacom held talks to buy Facebook.

Social networking sites typically allow users to create and share blogs, pictures and videos with friends and the wider public.

Facebook caters primarily to U.S. college students but recently announced plans to open its site to admit outsiders.

The sector drew investor attention when News Corp. bought MySpace for $580 million last year, and General Electric Co.’s NBC Universal bought women’s online network iVillage for $600 million earlier this year.

Yahoo has built a strategy of drawing Internet users and advertising through building community-based services on the Web, but acquisitions so far have been on a small scale.

Microsoft has cultivated a following among young video-gamers with its Xbox consoles and has built an Internet video-sharing service to lure Web advertising dollars.

Meanwhile, Viacom, under recently ousted Chief Executive Tom Freston, was viewed as being less aggressive than its rivals at pursuing its Internet strategy aimed at young audiences. The company’s new CEO, Philippe Dauman, said this week he was looking at small acquisitions, but “only if they complement what we’re doing internally.”

Facebook, based in Palo Alto, California, was founded by Harvard student Mark Zuckerberg and two fellow students with an eye toward creating casual but semi-exclusive networks of friends — and friends of friends.

It took off on college campuses in the wake of the rapid rise and subsequent decline of Friendster, the pioneering social network in 2004. In two years, it has become the primary online meeting place for a generation of U.S. college students.

Thursday’s Wall Street Journal article quoted Zuckerberg as saying: “I would never say that at no point in the future would we go public or become part of a larger company ... but what I would say is, it’s not our priority.”

Officials at Viacom, Yahoo and Facebook could not immediately be reached for comment.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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