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by Mike Zazaian September 21, 2006 - 12:07pm, 2 Comments

Yahoo Negotiates with Facebook Over $1 Billion Deal

Social networking powerhouse facebook is allegedly involved in talks with Yahoo over selling out for a cool one billion dollars.

According to the Wall Street Journal, Facebook approached Yahoo about the merger just days after Yahoo’s stock plummeted 13% due to worries that popular search engine had lost substantial profits in ad sales. Facebook had also approached Microsoft and Viacom earlier in the year regarding similar matters, but no agreements were reached in the talks.

As social networking sites become increasingly popular, so do the premiums on the companies. Facebook competitor MySpace sold out to News Corp. for $580 Million US earlier in year, and a $1 billion exchange for Facebook would mark the highest cost ever paid for such a site.

22-year-old Facebook founder, CEO and Harvard drop-out Mark Zuckerberg has brought an interesting dynamic to the talks. From a passage in the Wall Street Journal:

At one point in the Yahoo negotiations, the talks extended into the weekend, says a person familiar with the matter. Mr. Zuckerberg, this account continues, said he couldnít take part because his girlfriend was in town. Others pointed out they were closing in on a billion-dollar deal. Mr. Zuckerberg said it didnít matter: his cellphone would be off, this person says.

With that kind of personality behind it it’s easy to see why Facebook has grown as quickly as it has.

[via TechCrunch]