Sun, Dec 19, 2010 - Page 11 News List

Facebook planning 15 buy-ups

Bloomberg

Facebook Inc, the world’s most popular social-networking service, plans to make about 15 acquisitions next year, accelerating its dealmaking pace as it seeks engineers who can help keep rivals at bay.

“They will be a mix of talent acquisitions, where we’re looking for people to run important parts of our product, who have a really strong vision,” Michael Brown, a corporate-development executive for Palo Alto, California-based Facebook, said at an event last week.

The acquisitions could be in social commerce, as well as mobile and local technology, Brown said, speaking at a panel discussion hosted by VentureArchetypes, a startup consulting firm. The six-year-old social-networking company also is focused on finding people who have leadership skills, he said.

Facebook, which has more than 500 million users, is enhancing features and advertising services to maintain its surging growth. The company’s popularity has helped propel this year’s sales to about US$2 billion, exceeding previous projections, three people familiar with the matter said this week. The site has vaulted to third in global users, behind Google Inc and Microsoft Corp, according to ComScore Inc, a research firm in Reston, Virginia.

The company is interested in pursuing larger, more complex deals, Facebook sirector of corporate development Vaughan Smith said earlier this year. Facebook has typically focused on acquisitions with 12 or fewer employees.

As of early August, the company had made five acquisitions this year. That followed one apiece last year and in 2007, and none in 2008.

Meanwhile, Facebook, Groupon Inc, Twitter Inc and other top venture-backed Web companies have seen their combined value rise 54 percent since June, as investors race to buy stakes in social-media startups, according to Nyppex LLC.

Facebook’s value, based on the prices institutions are bidding for privately held shares, has climbed 56 percent to US$41.2 billion as of Dec. 1, Nyppex said on Friday in a report. Groupon’s valuation quadrupled to US$4.8 billion, while Twitter more than doubled to US$3.71 billion.

Nyppex produced the research for money managers, venture funds and corporations that want a piece of Web startups, Nyppex managing member Laurence Allen said. He focuses on so-called secondary transactions — deals that involve buying stock from existing shareholders, including employees, rather than directly from the company.

Nyppex estimates that secondary-transaction volume will more than double this year to US$4.9 billion as companies delay initial public offerings.

Estimates of Facebook’s valuation can vary widely. A recent SharesPost auction pegged its worth at US$56.7 billion, the online marketplace said on Friday. The auction involved 165,000 shares at a price of US$25, according to the Santa Monica, California-based firm.

“You have an increasing number of wonderful companies that have already proven they have a lot of value,” said Eric Jackson, who co-founded CapLinked Inc last year to help private companies and investors connect online. “People naturally want a chance to invest in a company like that.”

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