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"Karel Baloun was an early engineer at Facebook, and authored a new book on the subject, Inside Facebook, providing an insider's opinion on Facebook's success and founder Mark Zuckerberg.\nFollowing 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.\nThe 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?\nZuckerberg 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.\nPotential Suitors\nViacom has been in talks, after failing in 2005 to secure MySpace for $500m, but on Oct 5th the new CEO Redstone claimed on TV that the price around $1B is too high.  Rumors are that Yahoo is continuing negotiations in that range.  Google failed to buy MySpace and ended up paying $900m for just an exclusive ad deal, which contributed to aggressive bidding in the YouTube deal.   Microsoft could be using the ad deal as a launching point.  Having finally spun out its 3+ years of hidden social networking R&amp;D as the beta of Wallop, if the site turns out to be dramatically less sticky than Facebook, Microsoft would be a suitor.  Wallop has the cool, slick next generation user interface and high end branding, whereas Facebook has highly structured data and a purposefully utilitarian interface.  Perhaps a natural fit.  And you'd have two Harvard dropouts reunited.\nMicrosoft could offer $2 billion or even more, if they felt like it.  Unfortunately, they don't have a history of successful website acquisitions, and it is a very corporate environment.  They might even do meetings at 8am. \nAnyone else?  Google could jump again, and could monetize well.  Reports say Facebook could break its Microsoft ad deal for only a $10m penalty.  Yahoo is a solid cultural fit.  With Flickr they've shown that they can acquire a company and give it operating autonomy.  It could remain \"A Mark Zuckerberg Production\" and he'd be a rockstar to a new legion of fans.  But Yahoo's extended stock slide, draining its market cap down to $31B (a quarter of Google's), and limited cash+equivalent assets (around $2.5B to Google's $10B) make even one billion sound like a lot of money.  So even if Yahoo wants to win badly, it's hard this quarter.\nI have never seen Zuckerberg step down, concede.  Having reportedly rejected large offers, without even showing excitement or consideration, he has absolutely zero motivation now to go back and reverse himself.  Is $2B+ too much?  The short answer is no.  (The long answer is in my book!)  We could see an acquisition any day, well above $1B. Or we may not see one for months until an eventual IPO.  Zuckerberg is happy and fine either way, still having fun."^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2006/10/27/why-zuckerberg-wont-accept-just-1-billion-from-yahoo/>