Just Take the $1.5 Billion and Run, Idiot (History Repeats Itself)

I’d like to pseudo name this post: Ideas with Dumb CEOs.

Mark Zuckerberg is testing history every time he turns down an offer hoping for more.

In high school, Zuckerberg … created Synapse, a plug-in for Winamp media player that automatically creates user playlists based on previous song preferences … many large corporations offered to buy it for as much as $2 million. Zuckerberg … declined those offers at first. By the time they changed their minds after entering college, the offer was no longer available.

Why didn’t he sell out for $2 million? Because he thought he could get more. History repeats itself.

Some of you may recall that Yahoo was prepared to pay up to $1.62 billion for Facebook a few months ago. But Facebook turned this offer down, waiting for the $2 billion offer.

Well, now we have news that Facebook ads perform worse than Myspace ads by a factor of two, which isn’t surprising considering that Myspace has a more diverse (and older) crowd than Facebook.

Myspace, is a better medium for marketers: for a similar set of advertising campaigns, its click rate, a measure of the audience’s engagement, was 0.10%, more than twice Facebook’s … “Facebook was consistently the worst performing site on just about every campaign we ever ran with them.”

For a company asking for $2 billion with a supposed revenue (not profit) of $150 million, this isn’t exactly great news. Revenues are generated when you have people buying your ads, but if your ads are known for being ineffective, then your buyers – and thus your revenues – will fall.

End the greed and sell. Microsoft, who is friendly with Facebook, hasn’t taken the bait, and they’re notorious for taking losses for market share. If Yahoo can’t afford it and Microsoft passed, how many other companies have the synergy and cash to make such a large investment?

Google? Well, the CEO of Google recently said he has no plans for purchases of that nature. So who else? Hm?