Nobody has said it, so I guess I'll go ahead -- I don't like to hear this.
I use Facebook a lot, but I think Friendfeed is such a great product and that Facebook is such a mature site that nothing good can come of the acquisition.
The absolute best case would be that the Friendfeed talent supremely cleans up the code at Facebook to make it a much faster site, but even that would be at the cost of Friendfeed's development.
Friend Feed now gets a hold of those 250 million or so users, which is part of the goal- the goal being to make the best possible social network with the most users. Yup, this helps facebook become better, and friendfeed, although it might not exist anymore, gives the developers 250 million users. Sounds alright to me.
I disagree that nothing good can come of it. Friendfeed has mastered real-time whereas Facebook still hasn't. Friendfeed can step in and clean up Facebook's news feed and make it a lot better, which I'm sure they're going to be tasked with doing.
which is why i said "but even that would be at the cost of Friendfeed's development."
Friendfeed has already admitted they don't know what will happen to their product long term now. if they disappear, that's one competitor that goes away, which probably will mean slower innovation in social sites in general.
I'm puzzled by this acquisition from FriendFeed founder & CEO Paul Buchheit's perspective. As employee #23 at Google, Paul was already independently wealthy when he started FriendFeed. Though getting richer seems a likely secondary motive, I always figured FriendFeed was primarily a way for Paul to have the excitement of running his own company. Now he will (presumably) become an employee at Facebook, in exchange for an amount of money that can't possibly represent the bulk of his net worth. That doesn't seem like a particularly good outcome to me. Does anyone know any different?
I'm guessing he's interested in social networking on a broader scale than just getting rich off it. Running your own business can be exciting but being involved in something that is fundamentally changing the way humans interact with each other on a massive scale is probably pretty neat too.
I remember reading that post when he wrote it. From the post:
That's why, even though I don't financially need to work, I choose to work (and end up staying up until 4am pushing new code). It's why we created FriendFeed, to have a great place to work, a place where we can build great products and have happy users. Of course I'd also like to earn a few billion dollars, and I plan to make all of our employees very wealthy, but that's more like a bonus.
Rather than undermining it, I think this underscores my point. It's precisely because there's more to life than money that I'm surprised he was willing to sell. I would have expected only a ~$1 billion price tag to tempt him.
I'm going to guess that the fact that Mark Zuckerberg showed up is a sign to assure him that he's going to be a very well-respected and well-tended to employee at Facebook with access to a bigger engineering team, a huge user base, all the resources he wants, and maybe even a chance to get a crack at Facebook software itself.
This doesn't make me happy. FriendFeed is an amazing product, and though I'm glad that they are getting their payday for it, I hope the service doesn't get killed off or abandoned. I'm not so much a fan of Facebook, so potentially being forced to use it so that I can continue to use the features I love from FriendFeed is more or less going to cause me to look somewhere else for those features, which unfortunately is not something I'm likely to find elsewhere.
The problem is with so many big social graphs already on Facebook, Twitter, MySpace etc. it's difficult to build another. They were competing against Twitter and Facebook at the same time. Twitter is getting masses of press and Facebook already has masses of users. FriendFeed had a good product technically but still weren't getting there in gaining active users.
FriendFeed was a technology company they know search, real-time, scaling etc. but social networking isn't just those things. Facebook gets the interface and it clearly works for people, but they have so far not done much with realtime, and since it's new I expect there are very few people that have experience of that.
To me, both sides needed this, friendfeed had stopped growing and Facebook needs to evolve against Twitter and the trend for realtime (on the web) in general.
General questions about "talent acquisitions" ... when it happens, what's to keep the talent from leaving? Is it generally a scenario where the talent wouldn't sell if they didn't want to stay on board–or are there also clauses in the acquisition that actually prevent them from leaving?
Vesting. Nearly all startups grant equity options to employees, and these options vest over a certain period of time (usually 4 years). While employment is usually at-will, if you leave, you lose all of your unvested stock (hence, the incentive to stick around).
You can offer vesting or other stock type transactions to secure loyalty, or it can even be as simple as offering retention bonuses to key staff members. It's not overly complex, and talent would be assessed at individual performance and job function levels.
Partially, but Friendfeed has a lot of technology that Facebook would want. They have a good grasp of real-time and search, they have the full firehose to Twitter (which is not something Twitter would have given to Facebook otherwise -- Google is desperate for such access), and the team of course. I don't think Frienfeed is at the top of its category either, which means that it probably was affordable.
For the man who built gmail and his hand picked team of techs, $20-40 million (less the actual company value) is probably a pretty good deal, especially for a company that really needs to make some cash in the next year or two.
Assuming that this type of information is worth anything, Friendfeed delivers insight into corelations like 'how many FB users also do use SN XYZ regularly', or not?
I think the most interesting thing about this (other than the fact that Friendfeed sold so early) is that, I'd guess, about half the company is already set for life from Google.
This is good news for me, as I use Facebook and have been a long-distance admirer of FriendFeed with no time to actually investigate yet another new service.
Friendfeed raised $5m... I'd guess on a post-money valuation of $25m. So a $25m exit would basically mean that the investors in the most recent round get a 1 to 1 payout for their investment. Not a big win.
But justifying a $50+mm offer for FriendFeed seems awful hard-- so my guess is $25-$35m.
It does get the FF investors a pile of Facebook stock which is pretty hard to come by (but at what valuation for FB?).
OTOH, Facebook has scads of stock to give away, and at their atmospheric valuations, buying FriendFeed for $100m in pure stock would be like trading 1/65th of Facebook ($6.5B valuation) for it...
I doubt they used much cash. Facebook is bleeding cash and tossing around that kind of coin for a mostly talent based acquisition doesn't make a whole lot of sense.
This subthread is 'guesstimates'. Redorb gave his honest guesstimate. Time will tell if it's right, but in the meantime it's rude to vote this comment down to -4 fade-out (where I saw it) just because you disagree.
Have terms been disclosed? Until they are, Redorb could be right. At least he described the parameters of his 'guesstimate' and put it on the record next to his name and history of contributions. Anonymous downvoters are just grunting, "no."
What people objected to were the "great signing bonuses". For someone who already has oodles of money (which, being early Google employees, we assume they do), 200K is not that much.
It was a fair comment in the context of the thread. Predictions should be rewarded or punished based on whether they eventually pan out, not armchair snap-judgment popularity.
The fact that it's different from the pack of similar guesses makes it a more valuable contribution, to me, even if it winds up wrong.
It was just a guess, thanks for bringing the comment back to 1 (even) - I now see that TC has it at 50mm, that is really high in my head... and now twitter has one less exit option.
It did say 15mm was cash. Guess that is still 50% off...
I was hoping it would be google that would step up to the plate, not facebook to be honest. The friendfeed team is a serious weapon for facebook to wield against google and I don't know why the FF guys would enter this war, on this side. Maybe Google did something to piss them off? On the plus side, the FF guys will now get paid for the FB dev work they have been doing anyways. If I recall correctly buchheit was also involved in adsense, another pain point for facebook. Also the real-time search assets that fb would get from ff may fill the goals that facebook had with the attempted twitter acquisition.
Could the agreement by FriendFeed, to sell to Facebook have been pushed along by the possible emergence of the supposed FriendFeed Killer by Apple, dubbed iFriendFeed (http://www.techcrunch.com/2009/08/11/apple-planning-some-sup...)? Maybe. If so, the company may have cashed on on that $50 million just in the nick of time. But still, Facebook also benefitted from aquiring those former Google Vets that can enhance their creative social media service quite a bit.
Huh! I must admit I was secretly hoping that would happen. I hope that's more than a recruitment round, and that Facebook will now gain all the functionality from FriendFeed.
FB has always wanted Twitter, but Twitter is probably too expensive at the moment. So it makes sense for them to buy FF. Not sure what they would do with it though.
I use Facebook a lot, but I think Friendfeed is such a great product and that Facebook is such a mature site that nothing good can come of the acquisition.
The absolute best case would be that the Friendfeed talent supremely cleans up the code at Facebook to make it a much faster site, but even that would be at the cost of Friendfeed's development.