] HipMojo.com » Mark Zuckerberg/Facebook: The Entrepreneur’s Dilemma

Mark Zuckerberg/Facebook: The Entrepreneur’s Dilemma

The last time we heard an M&A rumor involving Microsoft, Yahoo!’s stock shot up 18%, only to come crashing down when nothing materialized.  In fact, by the time the markets closed on the very same day the rumor crept up [again], that rumor was squashed.

Today, the rumor mill began again with Facebook being the latest company within Microsoft’s cross-hairs.  If there’s one thing I learned involving MSFT is I’ll believe it when I see it. 

Whether MSFT, Yahoo!, Google or News Corp. decide to pay anything over $3B for a company with $100M in revenues remains to be seen.  It’s one thing to pay 30 times revenue for something like Doubleclick that is a monetization engine, it’s another thing to do so for Facebook.  Of course, Facebook equals users, which equals growth, but we’ve been down this path and know that users do not equal revenues, let alone profits.  I think that most companies could integrate Facebook in any one of those companies and make something out of it… but don’t kid yourself, the devil’s in the details.

Facebook is the right hands could prove to be a boom, in the wrong hands, it could be a bust.

Ultimately, this boils down to one of the oldest concondrum facing private companies: sell or remain independent.  When Yahoo! offered $1B for Google, Google was nowhere near the company it is today… though it was already clear that search advertising would become the web’s holy grail.

Social networking has hitherto proven to be an elusive cash cow… and that is something that must not be forgotten.  Facebook could make bundles of money, but could is really not an issue right now… online, everything could.

Mark Zuckerberg has stuck to his guns and that might prove to be a wise move… but he has to ask himself if he wants to become a 23 year old who became a multi-billionaire and then sold to a mega-corporation or if he wants to remain in full control of his destiny and become the next Google.  There’s no guarantee of the latter, though the former is all but guaranteed.

There are no guarantees in life, or so they say… so maybe that last part will play a part in Mark’s decision.  Sure, the VCs usually have a say, but in this case, Mark seems to be in charge…

In life, regret minimization is a major force in making decisions.  This time around, it’s no different.

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Posted By: Ashkan Karbasfrooshan | Jul 12th

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