Facebook, a social site, has a suitor

Yahoo offers about $900 million to woo the 22-year-old founder of Facebook and says it will keep him in charge.

Mark Zuckerberg is a member of the Google generation, one too young to remember all the ambitions dashed and fortunes lost when the last dot-com boom ended.

That may be one reason Zuckerberg, the 22-year-old founder of Facebook, a social-networking Web site, has so far shied away from selling his company, rejecting offers that would have made him several hundred million dollars.

"We're focused on building the company for the long term," he said Thursday.

When Viacom offered $750 million for Facebook in January, he asked for $2 billion and was rebuffed, according to a person involved in the negotiations. Now, he remains undecided about the latest offer, made in the last few weeks by Yahoo. That offer, first reported by The Wall Street Journal, was confirmed Thursday by two industry executives, one briefed on the deal by Facebook and the other by Yahoo. Both spoke on the condition of anonymity because the negotiations are continuing.

To woo Zuckerberg, Yahoo has offered about $900 million for Facebook and says it will keep the company somewhat independent, with Zuckerberg in charge. This has been its model with other acquisitions like Flickr, a photo-sharing site, and Del.icio.us, a social bookmarking service that lets members share lists of their favorite Web sites.

"A lot of people say there are problems with having a 22-year-old CEO, but one thing that is good about it is that he doesn't remember the boom and the bust that followed," said an adviser to Facebook. "That has distorted the thinking of a lot of people. If they have a good product or service, they sell way too early and they don't stick with it."

The adviser spoke on the condition of anonymity because of the sensitivity of ongoing negotiations.

Zuckerberg, through a spokeswoman, declined to comment on any potential acquisition offers.

Money, at least so far, does not seem to draw him. He lives in a barren apartment in Palo Alto, Calif., a short walk from Facebook's office. He only bought a stereo recently at the request of his girlfriend.

"Mark is the kind of guy you worry needs to get other things in his life," said David Sze, a partner with Greylock Partners, one of Facebook's venture capital investors.

By all accounts, Zuckerberg is motivated by his passion for his invention, which he created less then three years ago as a Harvard undergraduate. The site quickly became an electronic bumblebee, pollinating many American colleges with gossip, flirtation and news of the next fraternity party.

He said the minimalist design sensibility of Google, and also Apple, influenced how Facebook should look.

"I can remember the time when Yahoo was the coolest company, but for me and a lot of people my age, that is how people feel about Google," Zuckerberg said in an interview earlier this month.

He also modeled his management style as Facebook's chief executive on that of Google's founders--Larry Page and Sergey Brin--as well as Steve Jobs of Apple Computer.

Zuckerberg keeps tight control over the company's activities. He still writes some of the site's program code, designs most of its features and represents the site in public.

And he has been able to keep an unusually high share of the stock in Facebook, giving him the dominant say in its fate.

For Yahoo, an acquisition of Facebook would solve many problems. Yahoo has been trying, with little success, to build its own social networking service called Yahoo 360. Its brand is not seen as relevant by younger people, something the company has been trying to fix. Most of all, its growth has been slowing, increasing the gap between Yahoo and Google, which has become the largest Internet company.

"Yahoo is losing its grip on the younger demographic," said Jordan Rohan, an analyst at RBC Capital Markets, who said he thought that Yahoo should buy Facebook, even at a high price. "It needs to buy its way out of this."

Yahoo itself has been inconsistent about its pursuit of Facebook. It made an offer last summer, then withdrew it in July, the day after it announced disappointing second-quarter earnings. And Yahoo, which has prided itself on financial discipline, is still unsure exactly how much it wants to pay for such a small business. Facebook will have revenue of less than $50 million this year, according to two people briefed on the company's finances, and hopes to take in more than $100 million next year. It has been profitable.

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