Facebook to pay up if acquired

October 4, 2006

The New York Post carries an article today about Facebook and the possible payout they would have to make to Microsoft if Yahoo bought them. The story is that when Facebook struck a deal to carry sponsored links from Microsoft in August the agreement carried a clause for Facebook to pay up to the tune of $10m if bought by a rival to Microsoft.

Now Yahoo is getting mentioned as the possible buyer that would mean a payout would have to be made by Yahoo in order to complete the deal.

Of course with the $1bn price tag being whispered for Facebook the payout would be a drop in the ocean so it won’t stop a deal going ahead. But I’m sure it will leave a sour taste in the mouth of the Yahoo execs.

The bigger question is whether Yahoo should buy Facebook, or perhaps they should put some of their talent to work on turning Yahoo 360 around and making a success of it. There was a time when everyone had a Yahoo profile page, and Yahoo messenger was up there with the most used IM clients. Of course a lot of that changed with various problems such as the controls put on Yahoo chat and the profiles being taken over by spam, but Yahoo 360 is an okay product and with a little work and innovation you would think it could be turned into a pretty good social networking tool. Tie in the rest of the Yahoo stable and you have something far superior to Facebook anyway. Don’t you??

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