Yahoo! Could Buy Social Networking Site

Yahoo! is said to be in talks to buy MySpace and Bebo rival Facebook, for a figure thought to be close to $1 billion (£526 million).

Any move on the social networking site, which is the seventh most visited site in the US, could anger Microsoft. Last month, the software giant signed an online advertising deal with Facebook, guaranteeing the site a minimum of $200 million over three years and aping a similar deal between MySpace and Google.

Facebook, which has more than nine million registered users, signed a deal with Microsoft after just a week of existence. As well as becoming the site’s exclusive provider of banner advertising, Microsoft agreed to be the site’s provider of lucrative sponsored links, using its adCenter platform.

Microsoft is rumoured to have been in talks to buy Facebook this year, whilst the company was also courted by US media conglomerate Viacom and held discussions with Yahoo! during the summer, though talks collapsed over price.

As well as Rupert Murdoch’s acquisition of the social networking giant MySpace last year for $580 million, the search engines have also realised the potential of such UGC sites. Last month, MySpace signed a deal with Google worth over $900 million in advertising revenue over three years (see MySpace And Google Sign Exclusive Deal).

Mark Zuckerberg, a student studying psychology and computer science at Harvard, set Facebook up two-and-a-half years ago. Zuckerberg, who is just 22 years of age, owns about 30% of the business, so any deal with Yahoo! would place him among America’s super rich.

Yahoo!: 020 7808 4200 www.yahoo.co.uk