Why Mark Zuckerberg Once Rejected Yahoo's Offer To Buy Facebook For $1 Billion

This year marks the completion of 20 years since Meta (formerly Facebook) was started by Mark Zuckerberg, along with other co-founders Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes.

In these two decades, Meta has gone on to become a $1.2 trillion company (which is its current market cap). But did you know that there was a time when Yahoo had attempted to buy Facebook! Yes you read that right. Let us unfold what had exactly happened.

Yahoo Offered To Buy Facebook For $1 Billion In 2006

Yahoo /Unsplash

Yahoo had made an offer of $1 billion to buy Facebook in the year 2006. However, Zuckerberg ultimately turned down Yahoo's offer by saying in a meeting "This is kind of a formality, just a quick board meeting, it shouldn't take more than 10 minutes. We're obviously not going to sell here." Zuckerberg's argument was that there were all many things Facebook was going to build, and he wanted to have a chance to build those products. And Yahoo had no definite idea about the future. They did not properly value things that did not yet exist. They were, therefore, undervaluing the business. This is why Zuckerberg rejected the $1 billion offer.

Before all that happened, in Facebook's early stages 2005-06 itself, Mark Zuckerberg and Chris DeWolfe, the CEO of MySpace, were in talks regarding a Facebook takeover. DeWolfe withdrew when Zuckerberg insisted on a $75 million asking price.

Then, in the beginning of 2006, Viacom made an offer to purchase Facebook for $750 million; however, Zuckerberg increased his asking price to $2 billion, and Viacom withdrew from the agreement.

mark zuckerberg facebook/getty

Also Read: From Yahoo-Microsoft To Twitter-Facebook: 10 Big Mergers That Did Not Happen

Twitter Had Rejected $500 Million Offer From Facebook In 2008

Just about a couple of years after Facebook rejected YahooĄ¯s purchase bid, Twitter did something similar with ZuckerbergĄ¯s social media giant.

As Twitter's user base grew in 2008, Facebook pounced at the opportunity to acquire the social media platform. However, Twitter allegedly turned down Facebook's proposal for two reasons. First, Twitter wanted cash, and Facebook's offer was all stock.

Second, Twitter was very optimistic about a revenue model that would be hidden and released later in 2009. Twitter turned down Facebook's 2008 offer because of these two factors.

twitter/builtinsf

Snapchat Too Had Rejected FacebookĄ¯s Offer To Buy It In 2013

In November 2013, Snapchat had turned down a $3 billion takeover offer from Facebook, marking ten years ago. The Wall Street Journal stated that other investors valued the two-year-old, loss-making company at over $4 billion at the time of the all-cash offer.

snapchat/Pexel

According to reports, co-founder of Snapchat's Evan Spiegel decided to hold off on considering any offers until the beginning of 2014 in the hopes that the company's growth would enable an even higher valuation. Plus, this wasn't Facebook's initial proposal. It had reportedly made an earlier that year, rejected $1 billion offer for Snapchat.

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