The Cost Of FriendFeed: Roughly $50 Million In Cash And Stock | Hacker News Reader

The Cost Of FriendFeed: Roughly $50 Million In Cash And Stock

techcrunch.com

21 pointsrokhayakebe15 comments

This is the real prize of the FriendFeed purchase. Facebook was not purchasing FriendFeed for the company. They were purchasing the Google Vets that developed it. Knowledge is key, and in the long run, what those FriendFeed guys know, understand, and are able to share from their experiences in their careers, education, and employment at Google, is priceless. The company itself is just an added bonus. These guys are the true intellectual property behind the physical that you see in the URL itself. With their help, Facebook can enhance its service in many ways through additional innovation, syncronization with FriendFeed, and greater competition with Google in the areas of social media, and maybe even some other aspects of the web business and online software that the company may be investigating in order to compete, that we are not 100% aware of at this point. I advise you to stay tuned for what's to come from Facebook in the near future.

With all due respect to Twitter, the FriendFeed acquisition at 1/10th of the cost was a better investment. You have the talents behind Gmail, and Google Maps (I believe), and now they are one of the largest consumer real time apps out there. It is also worth noting that they have done a great job at pushing new features live.

Is talent really worth $15 M? Seems a little expensive for a couple of programmers.

12 programmers, 1 million + users.

Now unlike Twitter, friendfeed is not made of a bunch of marketers following other marketers. If you follow someone on Tiwtter you get something like "Thanks for the follow. I am expecting to learn from you. Check my website...".

Also The discussion around a particular shared item on FF is easier to follow.

The number of users FF has that FB didn't already have is approximately zero.

Should make integrating the userbases pretty easy then.

... or pretty irrelevant.

I think FB got a great deal here.

They got ~10 top grade Google vets. Assuming they each have to stick around for 3 years,

$15MM/(10*3) = $500K/year each.

And the $35MM in stock = 0.54% of Facebook. Divide that by 10, and you get 0.05% per head, which doesn't seem extravagant at all.

It's the FF employees who are bearing most of the risk in this transaction, in the off chance FB isn't actually worth $6.5B.

It depends on how you leverage 10 top notch engineers. I'm guessing they wouldn't have done the transaction if they figure they couldn't get at least $50M in value from these guys which at Facebook's scale isn't that hard.

I thought Google Maps was done by the Brothers behind Wave (at least the main two people behind it, same as the lead at FF was the main guy when it came to gmail).

It's both. The Rasmussen brothers founded a small desktop-app startup, akin to what became Google Earth, which was later bought by Google. Meanwhile, Bret Taylor was the PM for Google Local (and I think Jim Norris was involved with this too). Google Maps happened when the Local team met the Earth team and started talking about what they could do to get all this cool satellite imagery with desktop-like interaction into a browser.

Also, arguably Bret and Jim were the leads at FriendFeed, since they came up with the original idea. AFAIK, they approach PB and Sanjeev as investors, and the latter figured that not only would they invest, but they'd sign on as cofounders.

50 million dollars for a web app? Is facebook even profitable yet? Call me a cynic but i don't think their "billion dollar company" will withstand the sands of time. Just wait for the next paradigm shift.

Wow, when will stuff like this end? I've been hearing this since 2004, when they were like 1% their current size.

It will end when they can sustain profitability. They are still a long way from that.

Really? Have you seen their financial statements? How do you know they're far away from that? Because everybody else says so?

Last I heard, they were expected to post $550M of revenue in 2009. Any insider you talk to says it would be trivial for them to become profitable, if they wanted to. And, in fact, they may be quite close to doing so in their current plan.

But then again, I don't have any inside information either. One thing's for sure, though: Bringing out the tired "Facebook is overvalued" and "Facebook will never turn a profit" lines is seriously annoying.

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