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batdog

By batdog
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Huguenot

Huguenot

Posted
Posted

Facebook isn't the same kind of beast as youtube. At core it's a networking site with blogging and photo facilities. It has more in common with myspace. However, it's huge, and since it opened up to the general public only a few months ago, it's anticipated it will grow very quickly.


Previously it was a college campus network only, but as such it had a strangle hold over a very attractive audience for advertisers. Despite this fact, rumour had it they were only generating $50m a year in ad revenues (twenty times less than a Yahoo! or a Google). Thus you have a huge commercial opportunity that's currently underperforming - that's takeover gold.


Both Yahoo! and Google are painfully aware that they don't have a social relationship with their users, and tend to be perceived as tools. As such they remain very vulnerable to competitors who may generate a technological advantage. Having a networking property locks in their audience by acting as a facilitator for their social life.


Such was Yahoo!'s desperation to make the buy that it was rumoured they offered $900m a couple of months ago.

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mockney piers

mockney piers

Posted
Posted

Not to mention flickr which Yahoo! seem to be trying to tie in to their yahoo accounts. But I really can't see what they're gaining out of that deal, unless they're planning to swamp the place with advertising, at which point I'll be finding a new photo sharing tool.


I can't say I've heard of facebook until now and I'm a pretty tech savvy person (ie I spend too much time at work browsing), that's a billion dollars well spent then.

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