The top story in today's online edition of Business Week is that online social networking powerhouse Facebook.com is for sale. For the tidy sum of of just $2 billion you can own a large part of the college student market. By the way, It was really no secret they've been shopping site for the past couple of months. I receive at least one call a week from various clients and media people asking my opinion of the site and how it became so popular so quickly. In its simplest form, the site is brilliant in offering college students exactly what they want: connectivity. Here's the scenario and you will quickly see how it scales to the 5 billion page views (which is more than Amazon.com) a month. Say you and I are good friends at a suburban high school outside Chicago. Upon graduation you decide to head south for some warmer weather and matriculate at the University of Florida that fall. I love the cold and love the wind and had much better SATs than you so I head over to Northwestern. As we settle into our new lives freshmen year at our respective schools we make lots of friends, all of whom are totally wired, of course. We stay in touch with each other all the time via cell phone and email and one day through a friend we stumble upon Facebook. In a short period of time through the networking capabilities of the site, I am communicating with your new friends (whom I never met face to face) at Florida and you are going back and forth with my new friends at Northwestern. Sounds simple right. It is, now just times that small case study by six million and you can see where the billions of page views come from.
I am no valuation expert, but $2 billion seems pretty heavy to me. Fox acquired Myspace which has four times the amount of traffic of Facebook for $580 million last fall. As much as I think MTV would benefit from folding Facebook into its offerings, I have to believe MTV wouldn't pay that much, especially since there are still very big issues to be worked out, that is the safety and security issues that get all the ink right now. Whatever the sale price ends up being, the bottom line is a couple of college students started something that is relatively simple, offering students exactly what they want, when they want and it took off.