Facebook has just issued a press release confirming its acquisition of the social-sharing site FriendFeed.
As a result, FriendFeed's staff will integrate with Facebook, and its four founders will assume "senior roles" at the company. So far, no financials have been disclosed or made up by tech bloggers.
A couple of things are funny about this acquisition. Let's start with wording.
Perhaps this is just me, being a wordswoman and all, but I found it comical to read the headline on Facebook's press release: Facebook Agrees to Acquire Sharing Service FriendFeed [emphasis mine]. Agrees? Was there begging involved? Perhaps FriendFeed aggressively Poked Facebook until the company consented to the purchase? Or maybe Facebook's CEO Mark Zuckerberg made a hasty bet during a beer pong game with FriendFeed's co-founder Bret Taylor. If I lose, I'll buy you.
Weirder than the verbiage is why Facebook has made this acquisition at all. Some bloggers are gleefully citing the "obvious" synergies between the sites. It's true. Both are great places to waste time, stalk people, make capital-F Friends, and write narcissistic rants. Also cited are the ways Facebook has recently made itself more FriendFeed-esque with its "Like" feature and real-time microblog.
The difference between the two sites is their traffic. This Compete graph below will show you that Facebook has a lot of activity and FriendFeed is as active as my dead grandmother:
So, from Facebook's perspective, why the purchase?
Facebook and FriendFeed both claim to be impressed with each other's simplicity and passion for sharing. "Since I first tried FriendFeed, I've admired their team for creating such a simple and elegant service for people to share information," said Zuckerberg in a statement.
According to FriendFeed's co-founder, Taylor, "As my mom explained to me, when two companies love each other very much, they form a structured investment vehicle..."
Sigh.
Save for the exciting new names we can come up with (FriendFace, FaceFeed, yours here), this purchase seems unnecessary, and hardly monetizable, if Facebook already has the userbase and the ability to create the technology in-house -- which it's proved by releasing features that mimic FriendFeed's Functionality. Rob Salkowitz reported here that social aggregators are some of the most difficult Web services to profit from. With this buy, Facebook may have inherited another boulder to drag along on its crawl toward profitability.
And on that note, have you yet taken our poll asking which CEO of a Web 2.0 company should step down? Good old Zuck may have just made this too easy.
Well, yes, there are no problems now but we never had to deal with it before. The "free" scheme is the main one, and is used all over the internet. Eventually, someone might propose that antitrust doesn't have to be for paid-services.
"...great places to waste time, stalk people, make capital-F Friends, and write narcissistic rants." - I've never seen a better description for facebook...or Twitter for that matter...lol
I don't know about facebook's acquisition of FriendFeed having anything to do with Google - maybe it could be but not necessary - it could have been MySpace for all we know. And facebook can't keep buying out every potential competitor either.. Besides, as Nicole pointed out, FriendFeed's hardly a threat to facebook...it's not like facebook users are gonna migrate to FriendFeed when they get upset with some of facebook's policies. So, why facebook would agrees to acquire FriendFeed remains unclear. Maybe facebook recently ran out of things to do to get people's attention (When the site innovations run dry, better do some shopping for other sites).
Anti-trust issues concerning anything other than hostile takeovers or mergers are about as bogus as the ambulance-chasing schemes that permeate the legal landscape.
Since this appears to be a willing joining on the part of both parties, where's the anti-trust??
I don't think antitrust laws are applicable to social networks in the strictest sense of the word except if we want to modfy the meaning to take into consideration what is happening now in the digital landscape, as explained by this comments below:
" It is true that if a company has a dominant product, it may run afoul of antitrust laws if it "ties" that product to another--for instance, by requiring customers who buy that product to buy another product as well. When a company provides products for free on a stand-alone basis, however, it's not requiring anyone to buy anything. It may take business away from other companies trying to charge users for similar products, but that's hardly an antitrust issue."
so in other words, if you starting paying to join facebook and facebook keeps grabbing other social networks to reduce competition, then an antitrust isue will be on the offing. But as it stands now with the "FREE' concept of belonging to the socila networks, i really don't think any body cares a damn if facebook ended up becoming a Cisco!1
"Facebook paid nearly $50 million for the company, in a combination cash and stock offer, according to people familiar with the matter. The company paid roughly $15 million in cash, with the rest in Facebook stock that vests over several years and would be worth roughly $32.5 million based on the $6.5 billion common valuation an investor recently placed on the company. A Facebook spokesman declined to comment".
What does that number tells us about the viability of the deal? Then one would also like to know what innovation the FriendFeed team would brings to Facebook!!
I don't know, it sounds like a Poker Bet gone bad!!
On the otherhand, the way that Press Release is worded almost makes me think FriendFeed came to the table with an offer and FaceBook "agreed" to it...
Now what would drive that agreement?? Maybe FF was hinting at an Intellectual Property rights infringement concerning some of FB's recent FF similarities?...
Someone out there in Sili Valley can dig into that one, good luck with it!!
It's true. Anyways, FriendFeed, I've never used them nor really heard them making any noise until this acquisition. It's as you said Nicole, why would they buy a company when they could have just done the coding for what FriendFeed did in the first place? It seems to me to be a waste of money (Sure wish I had millions to just waste!), and I just don't know about this.
Luckily the purchase compared to what Facebook has going for it is basically a drop in the bucket and it won't sink anything, at least I don't think. The purchase makes me think of an analogy. Let's say I want a sandwich, and instead of making a sandwich on my own, I go out and buy a Subway franchise. Yes, I'm hungry.
Oh, and buying friends reminds me of the fraternities and sororities that account for about 25% of the total property that the university has.
I agree that this seems like a pre-emptive strike. Just think how the world would have been different if MySpace would have purchases Facebook before it was the social networking giant that it is? It is not so much a matter of what the purchased company adds now, but the competition and higher price-tag it prevents later.
According to the Wall Street Journal, the breakdown for the FriendFeed acquistion are as follows:
$15 million in cash. with the rest of FaceBook stock that vests over several years would yield a price tag in the neighborhood of roughly $32.5 million based on $6.5 billion valuation of FaceBook's common stock.
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