Why Zuckerberg Won’t Accept Just $1 Billion from Yahoo

Following the YouTube-Google acquisition, many analysts were predicting that Yahoo would make their move and snap up Facebook. A few weeks later, it seems the deal has gone stone cold, with neither party particularly keen to get a deal signed immediately. Meanwhile, Facebook has rolled out a number of features that have received a mixed response: the decision to open up the site met initial resistance among core users, the news feed raised privacy questions, while another move last week put ads within the feed. Today they’re launching a social bookmarking tool. We’ve yet to see how Facebook’s more conservative users embrace these ongoing feature additions. Personally, I think founder Mark Zuckerberg is happy to continue loading on the features and building out his site: one billion from Yahoo won’t sway him.

Zuckerberg has always been very clear that Facebook will be a successful independent business. Zuckerberg isn’t doing any simple bluff. He is wise to maximize his options, as time is on his side. This mantra, just build the best business, makes internal sense in two ways. First, engineers and product people are singularly focused on building product. The business side is crafting deals to secure a long term viability. A good thing, focus is. Second, it suppresses internal expectations of immediate gratification.

The mantra is obviously valuable externally, since Facebook needs only one buyer, whenever. Several companies with a market cap in the 10s of billions have been repeatedly in negotiations. Designed from the start to be cash flow positive, Facebook is free from the time pressure, lacking the bandwidth bill urgency that YouTube must have felt. Calculating VC investments + revenue – obvious costs, YouTube had a horizon of several months before needing recapitalization. Facebook’s horizon is.. infinite. Wouldn’t you believe they will be back?

Zuckerberg is having fun. It is a dream position for him, and also for just about everyone in the building with him. It’s only 9pm and the DJs are just setting up.

Courtesy: Mashable.com

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