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Facebook Acquires FriendFeed

techcrunch.com

279 pointsjasonlbaptiste82 comments

Nobody has said it, so I guess I'll go ahead -- I don't like to hear this.

I use Facebook a lot, but I think Friendfeed is such a great product and that Facebook is such a mature site that nothing good can come of the acquisition.

The absolute best case would be that the Friendfeed talent supremely cleans up the code at Facebook to make it a much faster site, but even that would be at the cost of Friendfeed's development.

Friend Feed now gets a hold of those 250 million or so users, which is part of the goal- the goal being to make the best possible social network with the most users. Yup, this helps facebook become better, and friendfeed, although it might not exist anymore, gives the developers 250 million users. Sounds alright to me.

I disagree that nothing good can come of it. Friendfeed has mastered real-time whereas Facebook still hasn't. Friendfeed can step in and clean up Facebook's news feed and make it a lot better, which I'm sure they're going to be tasked with doing.

which is why i said "but even that would be at the cost of Friendfeed's development."

Friendfeed has already admitted they don't know what will happen to their product long term now. if they disappear, that's one competitor that goes away, which probably will mean slower innovation in social sites in general.

I'm puzzled by this acquisition from FriendFeed founder & CEO Paul Buchheit's perspective. As employee #23 at Google, Paul was already independently wealthy when he started FriendFeed. Though getting richer seems a likely secondary motive, I always figured FriendFeed was primarily a way for Paul to have the excitement of running his own company. Now he will (presumably) become an employee at Facebook, in exchange for an amount of money that can't possibly represent the bulk of his net worth. That doesn't seem like a particularly good outcome to me. Does anyone know any different?

I'm guessing he's interested in social networking on a broader scale than just getting rich off it. Running your own business can be exciting but being involved in something that is fundamentally changing the way humans interact with each other on a massive scale is probably pretty neat too.

http://paulbuchheit.blogspot.com/2007/12/is-there-more-to-li...

I remember reading that post when he wrote it. From the post:

That's why, even though I don't financially need to work, I choose to work (and end up staying up until 4am pushing new code). It's why we created FriendFeed, to have a great place to work, a place where we can build great products and have happy users. Of course I'd also like to earn a few billion dollars, and I plan to make all of our employees very wealthy, but that's more like a bonus.

Rather than undermining it, I think this underscores my point. It's precisely because there's more to life than money that I'm surprised he was willing to sell. I would have expected only a ~$1 billion price tag to tempt him.

I'm going to guess that the fact that Mark Zuckerberg showed up is a sign to assure him that he's going to be a very well-respected and well-tended to employee at Facebook with access to a bigger engineering team, a huge user base, all the resources he wants, and maybe even a chance to get a crack at Facebook software itself.

That's pretty enticing.

I don't think that Paul Bucheit is CEO

It's surprisingly hard to find out (http://gigaom.com/2009/06/24/with-file-sharing-friendfeed-ri... was the best reference I could find), but it seems that you're right. It looks like FriendFeed cofounder Bret Taylor is the CEO. My mistake.

Goals change. Especially when faced with cash and wealth.

This doesn't make me happy. FriendFeed is an amazing product, and though I'm glad that they are getting their payday for it, I hope the service doesn't get killed off or abandoned. I'm not so much a fan of Facebook, so potentially being forced to use it so that I can continue to use the features I love from FriendFeed is more or less going to cause me to look somewhere else for those features, which unfortunately is not something I'm likely to find elsewhere.

Yes, and Facebook's history in dealing with its users is prompting me to remove my FriendFeed account now.

I agree - I am not at all comfortable with facebook, even though I use it, I am very very wary... They seem to be happy to do as they feel by default.

The standard 18 months ago:

http://www.thestandard.com/predictions/facebook-acquires-fri...

The Prediction Market community was overwhelmingly against the idea that FB would acquire FF -- but that was based on a 2008 timeline.

The problem is with so many big social graphs already on Facebook, Twitter, MySpace etc. it's difficult to build another. They were competing against Twitter and Facebook at the same time. Twitter is getting masses of press and Facebook already has masses of users. FriendFeed had a good product technically but still weren't getting there in gaining active users.

If you look at friendfeed's stats they've leveled off for the last 7 months http://siteanalytics.compete.com/friendfeed.com/

FriendFeed was a technology company they know search, real-time, scaling etc. but social networking isn't just those things. Facebook gets the interface and it clearly works for people, but they have so far not done much with realtime, and since it's new I expect there are very few people that have experience of that.

To me, both sides needed this, friendfeed had stopped growing and Facebook needs to evolve against Twitter and the trend for realtime (on the web) in general.

My guess is it's a talent acquisition.

General questions about "talent acquisitions" ... when it happens, what's to keep the talent from leaving? Is it generally a scenario where the talent wouldn't sell if they didn't want to stay on board–or are there also clauses in the acquisition that actually prevent them from leaving?

My understanding is that usually a significant part of the payout is in stock, which will vest over a couple years.

Facebook stock? haha

The latter. Always. Usually with extra incentive to ensure that you are productive over the period you are there.

But how does this work with the non-owning 'talent'? The owners of a company can't force/guarantee that their engineers are going to stay, right?

Vesting. Nearly all startups grant equity options to employees, and these options vest over a certain period of time (usually 4 years). While employment is usually at-will, if you leave, you lose all of your unvested stock (hence, the incentive to stick around).

You can offer vesting or other stock type transactions to secure loyalty, or it can even be as simple as offering retention bonuses to key staff members. It's not overly complex, and talent would be assessed at individual performance and job function levels.

Retention bonuses.

One simple way is to make that a condition of the sale.

The second is to defer part of the payment until that condition is met.

The third is 'golden handcuffs' though I doubt that would be very effective with this crowd.

Partially, but Friendfeed has a lot of technology that Facebook would want. They have a good grasp of real-time and search, they have the full firehose to Twitter (which is not something Twitter would have given to Facebook otherwise -- Google is desperate for such access), and the team of course. I don't think Frienfeed is at the top of its category either, which means that it probably was affordable.

Access to Twitter's "full firehose" can easily be turned off, if Twitter doesn't want Facebook to access it they can make that happen instantly.

True, depending on the agreement they have in place.

Yeah, no kidding. Does it become a real acquisition when it's really a disguised signing bonus? :-)

Assuming the acquisition was for $20-$40 million+ in stock, that's way outside the signing bonus territory.

For the man who built gmail and his hand picked team of techs, $20-40 million (less the actual company value) is probably a pretty good deal, especially for a company that really needs to make some cash in the next year or two.

It must be. There's not much interesting about Friendfeed that isn't done easier on Facebook.

Assuming that this type of information is worth anything, Friendfeed delivers insight into corelations like 'how many FB users also do use SN XYZ regularly', or not?

http://www.quantcast.com/friendfeed.com http://siteanalytics.compete.com/friendfeed.com/

Not likely. Note the following rather more informed subthread further down the page:

http://news.ycombinator.com/item?id=753825

The tech at FriendFeed is nothing to scoff at.

he didn't

Yes, saying it is for talent is like saying it isn't for tech.

You know that the talent is what produces the tech, right?

Sheesh.

Their tech is great, but look at who is running that place, it is like buying google at half price time.

Really good news, for both parties.

I think he was saying that the tech, impressive as it is, pales in comparison to the talent.

Wow, congrats to Paul Buchheit and the rest of the Friendfeed team!

Yep, I'm really happy for Paul. He's proven to be an astute investor and a great founder.

I think the most interesting thing about this (other than the fact that Friendfeed sold so early) is that, I'd guess, about half the company is already set for life from Google.

This is good news for me, as I use Facebook and have been a long-distance admirer of FriendFeed with no time to actually investigate yet another new service.

The IT Crowd wins again: http://www.youtube.com/watch?v=6rNgCnY1lPg&feature=fvst

See also: http://www.friendface.org

Any guestimates on the acquisition price?

It'll be fun to point back here if we ever find out.

Friendfeed raised $5m... I'd guess on a post-money valuation of $25m. So a $25m exit would basically mean that the investors in the most recent round get a 1 to 1 payout for their investment. Not a big win.

But justifying a $50+mm offer for FriendFeed seems awful hard-- so my guess is $25-$35m.

It does get the FF investors a pile of Facebook stock which is pretty hard to come by (but at what valuation for FB?).

OTOH, Facebook has scads of stock to give away, and at their atmospheric valuations, buying FriendFeed for $100m in pure stock would be like trading 1/65th of Facebook ($6.5B valuation) for it...

My guess is that deal will be somewhere around $25-30mn cash and $40mn stock.

I doubt they used much cash. Facebook is bleeding cash and tossing around that kind of coin for a mostly talent based acquisition doesn't make a whole lot of sense.

70 million? for what?

According to WSJ, roughly $15MM in cash, $32.5MM in Facebook stock, based on the previous $6.5 billion valuation.

http://online.wsj.com/article/SB124993350820120361.html

$25-50 million

way high, think more like <10mm , plus great signing bonuses for the employees (200k+ ea) ..

This subthread is 'guesstimates'. Redorb gave his honest guesstimate. Time will tell if it's right, but in the meantime it's rude to vote this comment down to -4 fade-out (where I saw it) just because you disagree.

The key point being that he wasn't rude or insulting or otherwise antisocial; he was just a bit wrong. That doesn't deserve massive downvoting.

Have terms been disclosed? Until they are, Redorb could be right. At least he described the parameters of his 'guesstimate' and put it on the record next to his name and history of contributions. Anonymous downvoters are just grunting, "no."

What people objected to were the "great signing bonuses". For someone who already has oodles of money (which, being early Google employees, we assume they do), 200K is not that much.

Besides being way off of the estimates of more reputable guessers, his comment provided no justification. Four word comment (essentially) = downvote.

Define 'reputable guesser'.

It was a fair comment in the context of the thread. Predictions should be rewarded or punished based on whether they eventually pan out, not armchair snap-judgment popularity.

The fact that it's different from the pack of similar guesses makes it a more valuable contribution, to me, even if it winds up wrong.

Again, I downvoted because he provided no commentary or justification.

It was just a guess, thanks for bringing the comment back to 1 (even) - I now see that TC has it at 50mm, that is really high in my head... and now twitter has one less exit option.

It did say 15mm was cash. Guess that is still 50% off...

200K is peanuts for the ex-googlers in friendfeed.

The founder of friendfeed was employee 20-something at Google. His washing machine probably cost 200k.

Just for the record, I was spot on:

http://www.techcrunch.com/2009/08/10/the-cost-of-friendfeed-...

"Facebook buying Friendfeed is like cloning yourself, not feeding it for a few years, and then eating it." http://www.fimoculous.com/archive/post-6353.cfm

"Facebook has acquired FriendFeed, we’ve learned. We’re gathering details now."

And so are they.

Sorry, couldn't resist. Data harvesting is the first thing I think of when I hear "Facebook" these days.

I was hoping it would be google that would step up to the plate, not facebook to be honest. The friendfeed team is a serious weapon for facebook to wield against google and I don't know why the FF guys would enter this war, on this side. Maybe Google did something to piss them off? On the plus side, the FF guys will now get paid for the FB dev work they have been doing anyways. If I recall correctly buchheit was also involved in adsense, another pain point for facebook. Also the real-time search assets that fb would get from ff may fill the goals that facebook had with the attempted twitter acquisition.

The plot thickens...

Perfect. I managed to put off signing up for FriendFeed long enough.

Haha..

I am also putting off signing up for Twitter.

Could the agreement by FriendFeed, to sell to Facebook have been pushed along by the possible emergence of the supposed FriendFeed Killer by Apple, dubbed iFriendFeed (http://www.techcrunch.com/2009/08/11/apple-planning-some-sup...)? Maybe. If so, the company may have cashed on on that $50 million just in the nick of time. But still, Facebook also benefitted from aquiring those former Google Vets that can enhance their creative social media service quite a bit.

I really hope friendfeed can stay independent, and grow itself into something much bigger.

On the other hand, this should create opportunities for other social aggregation startups.

Bigger than what? Facebook? The company that owns them?

Just close down Friendfeed now.

Huh! I must admit I was secretly hoping that would happen. I hope that's more than a recruitment round, and that Facebook will now gain all the functionality from FriendFeed.

FB has always wanted Twitter, but Twitter is probably too expensive at the moment. So it makes sense for them to buy FF. Not sure what they would do with it though.

I'm so happy. Twitter is run by a bunch of pseudo-technological hipsters. By FB buying FF, hackers unite to face the foe!

Disaster.

Now there is a hole waiting to be filled... with proven value.

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