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Facebook Abandons All Hope of Remaining Cool With Goldman Sachs Investment

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THE SOCIAL NETWORK, CTD.
DailyFeed
Eduardo: It’s time to monetize the thing.
Mark: Those Asian girls were cute. What were their names?
Eduardo: Did you hear what I said?
Mark: When?
Eduardo: I said it’s time to monetize the thing.
Mark: What does that mean?
Eduardo: I mean it’s time for the website to generate revenue.
Mark: No, I know what the word means. I’m asking how you want to do it.
Eduardo: Advertising
Mark: No. What were their names?
Eduardo: We’ve got 4000 members.
Mark: ‘Cause the Facebook is cool. If we start installing pop-ups for Mountain Dew it’s not gonna-
Eduardo: Well I wasn’t thinking it would be Mountain Dew but at some point—and I’m speaking as the business end of the company—the site—
Mark: We don’t even know what it is yet. We don’t’ know what it is, what it can be, what it will be. We know it’s cool, that’s a priceless asset and we’re not giving it up.

Fictionalized or not, this Sorkin-tastic scene from The Social Network illustrates the cornerstone of Mark Zuckerberg’s early attitude toward running his company: no amount of money is worth losing Facebook’s appeal of being cool.

I couldn’t help thinking of this moment when I read that Zuckerberg and Co. had just raised $450 million from Goldman Sachs, which is undoubtedly, you know, the coolest company around, way, way cooler than Apple, Urban Outfitters, and maybe even Morgan Stanley.

DealBook reported the details this morning:

The new money will give Facebook more firepower to steal away valuable employees, develop new products and possibly pursue acquisitions — all without being a publicly traded company. The investment may also allow earlier shareholders, including Facebook employees, to cash out at least some of their stakes.
And here’s what’s in it for Goldman:

Goldman’s involvement means it may be in a strong position to take Facebook public when it decides to do so in what is likely to be a lucrative and prominent deal…As part of the deal, Goldman is expected to raise as much as $1.5 billion from investors for Facebook at the $50 billion valuation.
The deal will likely double Zuckerberg’s personal net worth to somewhere around $13 billion, and catapults Facebook's valuation to $50 billion, way ahead of other online companies like eBay and Yahoo.

But what about that whole “cool” thing? Isn’t Zuckerberg at all concerned that aligning his company with perhaps the most reviled bank in modern history just a wee-bit, dare I say, lame?

I mean, this is the same guy whose fictionalized character in that movie told his business partner that Mountain Dew wasn’t cool enough to advertise on Facebook! The Dew!

(And, for the record, when it comes to sizing up cool, Goldman Sachs has 8,892 fans on Facebook; Mountain Dew has 4,020,147.)

Oh well. I guess we finally know what the value of “cool” is. Around $50 billion.
POSITION:  No positions in stocks mentioned.
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