“We are certainly not paying $2 billion for Facebook.”
Those words were uttered on March 30, 2006 by the person who was then president of News Corp.’s Fox Interactive unit. His name: Ross Levinsohn. Yes, the same Ross Levinsohn who was named interim chief executive of Yahoo this week.
On the day of Facebook’s initial public offering, which valued the company at more than $100 billion, those words look rather silly. But Levinsohn could be excused for expressing them when he did. It was just months after News Corp. spent $580 million on Myspace, which at the time had almost quadruple the number of users as Facebook. Later that year, Levinsohn’s current employer, Yahoo, almost bought Facebook for $1 billion.
On top of all that, Facebook was still mostly limited to students and founder Mark Zuckerberg was all of 21 years of age, just old enough to legally drink beer.
“It would make no sense for us,” Levinsohn said at the 2006 conference, sponsored by Bank of America in New York.
He still may have been right. Myspace turned into a flop, largely due to the rapid growth and better execution of Facebook. Had the situation been switched — Myspace remaining an independent entity and Facebook being controlled by an old-media corporation — who knows how things would have turned out.
What we do know is that Facebook is now bigger than the combined market valuations of News Corp., Yahoo and Viacom, which was yet another company that tried to acquire Facebook.
Speaking of things that make no sense.