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In July, Facebook announced its first acquisition, purchasing Parakey, Inc. from Blake Ross and Joe Hewitt. In August, the company was featured in a Newsweek cover story by Steven Levy in the magazine's annual college edition.[24] Facebook hired YouTube's former CFO Gideon Yu on July 24, 2007. Gideon Yu succeeded Michael Sheridan.[25]
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![[Facebook]](http://retrieverimages.lycos.com/images/f/a/c/facebook/i/032.gif)
That's because unlike other hot Web start-ups such as MySpace and YouTube, which were acquired by large Web and media concerns, Facebook wants to stay independent and potentially go public. Last year it stepped away from talks with Yahoo Inc. and Viacom Inc. to be acquired for close to $1 billion. The start-up's investors have publicly said they hope to take Facebook public at a valuation approaching $10 billion. That would require the company to generate far more revenues and profits than it currently produces.
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[E]stimates of Facebook's valuation soared during the summer of 2007. In October, Microsoft outbid its archrival Google to invest $240 million for a 1.6 percent stake in Facebook, which valued the company at a startlingly rich $15 billion.
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Mark Zuckerberg founded "The Facebook" in February 2004, while attending Harvard University, with support from Andrew McCollum and Eduardo Saverin. By the end of the month, more than half of the undergraduate population at Harvard were registered on the service. At that time, Zuckerberg was joined by Dustin Moskovitz and Chris Hughes for site promotion and Facebook expanded to Stanford, Columbia, and Yale.[9] This expansion continued in April 2004 when it expanded to the rest of Ivy League and a few other schools. At the end of the school year, Zuckerberg and Moskovitz moved out to Palo Alto, California with McCollum, who had a summer internship at Electronic Arts. They rented a house near Stanford University where they were joined by Adam D'Angelo and Sean Parker. Soon McCollum decided to leave EA and help with the development of Facebook and a companion website, Wirehog, full-time.
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Based on these types of numbers, Microsoft invested $240 million into Facebook for 1.6 percent of the company in October 2007. This meant a valuation of over $15 billion, making Facebook the 5th most valuable US Internet company, yet with only $150 million in annual revenue. Many explained Microsoft’s decision as being solely driven by the desire to outbid Google.
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In 2006, with the sale of social networking site MySpace to NewsCorp, rumors surfaced about the possible sale of Facebook to a larger media company. Zuckerberg, the owner of Facebook, had already said that he did not want to sell the company and denied rumors to the contrary.[58] He had already rejected outright offers in the range of $975 million, and it was not clear who might be willing to pay a higher premium for the site. Steve Rosenbush, a technology business analyst, suspected Viacom might.[59]
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