Wake me when they offer two billion
I read this morning that Facebook may be the next internet community to be acquired. Many in the tech space will know that the WSJ and Valley blogs see link have been writing about it for weeks in great detail.
There are two funny stories (maybe not if you’re the VC backer looking for the IRR) about the Facebook situation and the apparent approach of Facebook CEO/Founder Mark Zuckerberg to the entire M&A mating dance. Read the link above: when Microsoft wanted to have an 8:00 a.m. conference call with Zuckerberg to discuss their possible acquisition, Facebook advised that the 22 year-old Founder couldn’t meet…”he gets into the office at 10:30 a.m., sometimes”.
Story is that for US$1B he just wasn’t interested in getting out of bed…but for US$2B, now that might get his attention.
The other one (Sept. 21, WSJ) is that when Yahoo (US$1B price again) wanted to continue acquisition talks over a weekend, Zuckerberg told them that his girlfriend had come to town for a visit and he’d be turning off his cellphone to spend time with her. There’s a negotiating tactic!
Can’t imagine why they haven’t closed a deal yet.
Credit Suisse (the dealer formerly known as CSFB) advised Google see link on the acquisition of YouTube. Good for them; they were the architects of many fabulous tech deals under Quattrone and it appears they still remain at the forefront of the sector. And isn’t Frank’s comeback timed nicely, as well?
What is exciting about all of this isn’t the remarkable valuations or that Silicon Valley tech start-ups are now spending part of their US$20MM 1st round funding to put huge signs on their buildings again, its that tech investing just might be coming out of the post-bubble doldrums — or are we in a new bubble perhaps? First sign was the AIM IPO valuations (20x revenue), and now we are are back to valuing a business based upon eyeballs (YouTube) and not revenue or profits.
Which Canadian regions might benefit from these trends? Waterloo, Ottawa, Burnaby, Toronto and St. Laurent, among others. All have a decent smattering of early stage tech firms.