Back in July 2004, Facebook co-founder Mark Zuckerberg thought his social network wouldn't get very far and so it was better to simply sell it off to a bigger company. He just wanted to get as much cash out of it as possible so he could use the money to build other projects he was more interested in. The new tidbit comes to us just as Facebook has a valuation of $83.5 billion on secondary markets and is rumored to be filing papers for its initial public offering (IPO) this week.
Zuckerberg was just 20 when he dropped out of Harvard, moved from Cambridge, Massachusetts, to Silicon Valley, California, and was considering selling Facebook, even though it already had almost 1 million users. That's according to an IM chat log obtained by Business Insider:
Confidant: Well you should recover the shares you need to recover legal fees. Zuckerberg: I won't pay the legal fees Zuckerberg: The company that buys us will haha Confidant: Cool hopefully that'll be soon so you can move on and just work on what you want to Zuckerberg: Well it just needs to propel Wirehog Confidant: So you have gotten responses to your national recognition? Zuckerberg: Responses from whom? Zuckerberg: Some more VCs. Still talking to Google and Friendster.
Until now, it was thought that Zuckerberg simply said no to every offer presented to him. Facebook has had countless offers, or so the rumors say: an unnamed investor offered $10 million in June 2004, Friendster was interested in a purchase, Google offered to buy or partner in the summer of 2004, Viacom offered $75 million in March 2005, Myspace wanted to buy in spring 2005, News Corp (Myspace's parent company) wanted to in January 2006, Viacom came back in 2005, NBC was also interested soon after, Viacom again made an offer of $1.5 billion in 2006, Yahoo offered $1 billion in June 2006, AOL also considered $1 billion soon after, Yahoo came back again at the end of 2006, and finally Google offered $15 billion in 2007.
We know that both Friendster and Myspace died quickly as Facebook rose to the number one spot. Google also similarly failed: the company already had Orkut at the time, and so after giving up on Facebook, it bought the photo organizer service Picasa. Both have also been all but destroyed by Facebook.
After all this, Microsoft swooped in, but the company didn't give up after learning a purchase was off the table. In October 2007, the software giant bought a 1.6 percent stake in Facebook for about $240 million, giving the social network giant a valuation of $15 billion.
Except for the Microsoft investment, all these offers are just rumors since none of the information was released publicly. Just two months ago though, Facebook COO Sheryl Sandberg was asked about Facebook's offers and its unwillingness to sell out, to which she replied "No one even asks anymore."
In the end, these offers don't really matter since as you know, Facebook is still independent. It would appear that either Zuckerberg wasn't interested in most of the companies, and the rest of the time the amount written on a little piece of paper and given to him just didn't have enough zeroes. It's very interesting to learn that at one point Zuckerberg thought the complete opposite of what he does now: Facebook doesn't have a price tag.
Now for a quick history lesson. If you know what Facebook is but have never heard of Wirehog, don't be alarmed. The former is (it still exists) the world's largest social network while the latter was (it doesn't exist anymore) a friend-to-friend file sharing program that allowed people to transfer files directly between computers. Wirehog was created by Andrew McCollum, Mark Zuckerberg, Adam D'Angelo, and Sean Parker in Palo Alto. They described it as "an HTTP file transfer system using dynamic DNS and NAT traversal to make your personal computer addressable, routable and easily accessible."
Launched in October 2004, Wirehog was only accessible via an invitation from a member. It was originally planned as an integrated feature of Facebook, but it could also be used by friends who weren't registered on Facebook. Facebook and Wirehog were integrated so that Wirehog knew who your Facebook friends were in order to make sure that only people in your network could see your files. Wirehog was written in Python and was available for Microsoft Windows and Mac OS X, with a promised Linux version that was never released.
Until at least July 2005, Facebook officially endorsed the p2p client on its website. The project was killed in January 2006. At least one of its uses on Facebook, namely sharing photos, has been superseded by the introduction of photo sharing on the social network itself. Facebook now sees more than 250 million photos uploaded to the social network each day. Wirehog, Myspace, Friendster, Picasa, Orkut, and others have all suffered as Facebook has become more and more dominant.
- Will a $10 billion Facebook IPO be the beginning or the end?
- Facebook's 2011 revenue and profit numbers leak?
- Facebook's IPO will create over 1,000 millionaires
- Is your Facebook employee friend about to become a millionaire?
- WSJ: Facebook growth exceeds expectations, $100 billion valuation justifiable
- Facebook IPO slated for late May (rumor)