Facebook and the difficult art of shark-jumping

Saw this on The Henry Blodget blog......

It's been three weeks since Facebook's Mark Zuckerberg took a desperate Microsoft to the cleaners with a $15 billion valuation. It's been 2.9 weeks since Forbes reported that Facebook had raised an additional $500 million from "hedge funds," lending credence to the idea that the $15 billion valuation was actually reasonable. And it's been about 2.8 weeks since that $500 million was hastily revised to a "possible" $260 million by the Wall Street Journal.

Then, last week, after two weeks of deafening silence (and an anti-climactic launch of Social Ads), Portfolio reported that Facebook was still looking to raise that additional cash. And now, another week later...more silence...

Except for the snap, crackle and pop of cash burning......

Well, three weeks is eternity in Facebook time (at the company's prior rate of value-appreciation it would probably have been worth $20 billion by now), and the company has apparently still been unable to close a single additional dollar at that desperate-Microsoft $15 billion valuation. This suggests a few things:

- The joke was indeed on Microsoft.
- The "Social Ads" announcement that Microsoft was obviously privy to failed to spark the expected interest in anyone else.
- Facebook's war chest is going to be smaller than most people anticipated (because the company presumably is not about to obliterate its image by doing a "down-round.")

Actually I don't think the joke was on old MSFT...as we noted, not all their investment should be counted against their 1.6% stake - some was undoubtedly part of an Ad deal, and I reckon some could be thought of as a strategic investmemt in GOOG-blocking.

The real issue is that the Social Ads play got quite a drubbing among the smarter press and bloggers, and those of us who set up Pages and saw how limited the functionality was realised that even if (if) the social ads things works, its still some time away.

As to not doing a down round, one wonders what they were thinking when they punted for a $15bn valuation, given SocNet economics as they stand. Also, I wonder how long it takes to burn $260m with 50m (and rising) users apparently hitting 1,000 pageviews a month.....

Snap, crackle, pop....

Lessee now....GOOG and EBAY have already done their "interesting" deals, MSFT was actually quite sensible here...looks like its time for YHOO or AMZN to stump up the silly money this time round

Or time to start book on the down-round perhaps ?