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October 24, 2006

Yahoo Looking to buy Facebook?

As advertisers seek new media, that is, something extremely new and exciting a year or so ago that hasn't yet been co-opted by advertisers, many large companies have turned to the internet. Some have experienced more success than others, but the interesting thread that we're starting to see is that it seems like the best ideas develop organically and not developed by the companies that end up owning them.

Case in point: MySpace. What started as a networking site for local bands has now turned into one of the hottest sites on the internet for just about anything. As of now, it is partly owned by Fox, who is using it extensively to promote its new shows, such as It's Always Sunny in Philadelphia or Prison Break.

And Prison Break's site doubles as an Ad for Toyota, which is, of course, featured heavily in the show.

This all brings me to the article in question. What is it about The Facebook that attracts Yahoo? And what is it about The Facebook that attracts Yahoo to the somewhat ridiculous tune of $1billion? (With a "b!")

Well, for one, Google just dropped that sort of cash to obtain YouTube (which, in my opinion, spells doom for YouTube, but I'll pontificate on that later.) In spite of any predictions of doom, YouTube does have a very Google-istic existence: its name is synonimous with its function, it is relatively simple, and it sucks down massive quantities of bandwidth a day. Oh, nevermind the fact that Google's own video application is failing and this will pretty much save that. (Maybe.) And having that asset on its side really does give Google a whole gigantic new userbase to which it can peddle its ads.

So for Yahoo, the answer has to be the large new userbase it can call its "ad viewers." But The Facebook offers so much more to Yahoo: it offers an extension of Yahoo's new marketing direction - the homepage tailored to you. They just redid their page and guess what - they're not just a search engine anymore. They've still got the functionality, but Google's got the marketshare. So with the acquisition of The Facebook (if Yahoo did it), they would effectively renew themselves in the eyes of many of their users.

At first I would have questioned whether or not the Fox acquisition of MySpace would continue to provide MySpace's users with a reason to use the site - after all, if it were way too commercial, people might be jaded by the whole thing - and on a site born from independant bands, this problem might have been compounded. But it seems like everything is going ahead without a problem - MySpace is still popular and Fox is largely out of their hair.

I think that The Facebook could have the same success if Yahoo were to buy it - as long as Yahoo left it largely unchanged (seeing as though Facebook's users seem to cry loudly and en masse whenever there is a change.)

Posted by moday at October 24, 2006 01:49 PM

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