Well, I can admit when I was wrong. And a year ago, I told everyone that would listen that Mark Zuckerberg, the 24-year-old founder and CEO of Facebook, was greedy and crazy to turn down an alleged $1 Billion acquisition offer from Yahoo! I was wrong. He was right.
At that point Facebook was losing ground to competitors, MySpace was continuing it’s domination of the social networking space, and the kid had just walked away from a deal that could have made him worth $300 Million.
Since then, Facebook opened up their network to all users, and last spring launched Facebook Apps, a brilliant model that instantly created an ecosystem of developers seeking ways to expand their reach into the uber-loyal Facebook crowd (MySpace is playing copycat with a developer network of it’s own shortly on the way). They are gaining a million new members a week, and half of Facebook’s users are on the site daily. While it is unclear exactly how to monetize that usage, the potential is clearly enormous.
Combine the explosive growth of Facebook in the last year with the hyper-competitive acquisition market that have sent valuations soaring (DoubleClick bought by Google for $3 billion, aQuantive by Microsoft for $6 billion and Right Media by Yahoo for $800 million), and you end up with the seeds that grew Facebook into an absolutely astonishing $15 Billion valuation.
A valuation growth of $1 Billion to $15 Billion in about 12 months? Not bad, not bad at all…
Well played, Zuckerberg.