So rumors are flying that Facebook is shopping itself to IAC after talks with Yahoo! slowed down.
Last week the rumor mill was that IGN co-founder Mark Jung left Fox Interactive Media to head to Facebook. That’s nonsense, if that happens, Mark Squared will be responsible for the end of the Web as we know it. Do you really think that Mark Jung will be cool with Mark Zuckerberg talking to IAC’s Barry Diller sans Jung? And, by extension, do you think Mark Zuckerberg will be cool with Mark Jung talking to IAC’s Barry Diller sans Zuckerberg? I doubt Mark Z. and Mark J. will be able to get any word in with the other one in the room sitting across our answer to Tencious D, IAC’s Barry Diller. Disclosure: Mark Jung was my boss for 9 months. He then sued me. I won Phase 1. He resigned from FIM. The case is ongoing, I guess…
Anyway, I don’t think Yahoo! should buy Facebook. I’ve explained why here (Scroll down to #7 for that).
But more importantly, I don’t think IAC should buy Facebook. Sure, IAC’s acquisition of 51% of College Humor was not - ahem - gamebreaking, but it gave them a platform to reach students. College Humor this year took a page out of Facebook’s page and adopted a more aggressive strategy vis-a-vis signups and subscribers. Will it work? Who knows. That’s for another post.
But between College Humor’s Josh Abramson (whom I’ve met a few times) and Facebook’s Mark Z. (whom I have not), I’d say Mark Z. should remain independent and report to no one. It’s too late to start pretending that you can live underneath the corporate structure of either Yahoo! or IAC buddy.
Better strategy for IAC: your stock does not need a tonic, it’s doing quite well (I sold mine at just under $30 cause I wanted to cash in profits and eventually people will realize that Ask.com is a distant 4th in the space and it will take much, much more to catch up 3rd place MSN, MSN is showing signs of regaining its mojo, after all). You spent $10 million buying 51% of College Humor, invest another few millions and make that something that can be enough of a Facebook instead of paying $750 million to $1 billion for Facebook.
Don’t take it from me, take it from investor Warren Buffett: it matters what you pay for a stock, with College Humor, you have considerable “margin of safety,” with Facebook, you’d have none.
Disclosure: I own shares in Yahoo!, sold shares in IAC and MSFT recently.
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