FriendFeed cost estimated roughly $50 million in cash and stock
As the Facebook and FriendFeed deal is the latest buzz on the internet, yet the financial aspects of the deal are to be revealed to the masses, every one is querying about amount paid to FriendFeed over this business merger. According to Wall Street Journal Facebook paid about $50 million including $15 million in cash and $32.5 million in stock.
The stock has played very relevant role under this deal as the value of stock is derived and evaluated from the $6.5 billion common valuation after a recent purchase of employee stock by the Russian investment group DST. Another important issue related to this deal is the Benchmark Capital that amounts to the FriendFeed’s outside investor. It is expected that FriendFeed’s employee may be getting stocks; however, cash is paid to the outside investor. Benchmark has invested $5 million round in early 2008 and paid $15 million which is solid return on that investment. And for Facebook’s luck this is the 1/10 of the amount that it was paying to Twitter last year. But the problem is that Facebook was only paying most in cash and Twitter was emphasizing on cash.


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