Facebook Raises $25 Million. Takes Down For Sale Sign.

Posted on April 19, 2006

Silicon Beat reports that Facebook has raised $25 million. The social network site also denied the $2 billion acquisition rumor.

"It has never been our intention to sell the company," said Melanie Deitch, Facebook's director of marketing, adding that the latest funding puts the rumors of such a sale to rest. Late last month, Business Week reported the company had turned down a buyout offer for $750 million and was looking for as much as $2 billion, citing analysts saying that Viacom, owner of MTV, might make a good match.
David Sze, the venture capitalist who led the investment for Greylock, said earlier statistics from comScore showing a decline in unique visitors in February were an aberration, and that the company's internal statistics show continued robust growth. Indeed, the March statistics showed resumed growth on this metric too. We've mentioned David Sze's penchant for wonkish analytical circle- and matrix-drawing before here. We asked David where Facebook fits within his "matrix." He responded that Facebook is a "winner-circle" company. (Sigh, guess you had to be there.)

Bambi Francisco blogs that Facebook had a "$525 million pre-money valuation." Facebook is extremely popular among college and high school students. However, they won't be able to compete with MySpace's traffic without opening up their services to people who are not currently attending high school or college. They may not need to compete with MySpace if they can continue attracting a high rate of high school and college students. One option Facebook might take is to continue as a closed network and offer profiles to high school and college graduates. If they do this they will be entering in competition with subscription charging sites like Classmates.com and Reunion.com. Note: Facebook currently allows college alumni but only students with a college affiliated alumni email account can register. Only fairly recent college graduates are even going to have a college email account.