Friendfeed, Facebook (& Google?)

Posted on August 10, 2009

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Just saw that Facebook is acquiring FriendFeed. Found this interesting since the Google tree is expanding. Paul Buchheit is one of FriendFeed’s founders and the brains behind Gmail. After watching him speak on a panel last Spring, I wrote about Google, employee retention, and entrepreneurship.
FriendFeed is a small shop with only 12 employees according the TechCrunch article. Reminds me a bit on how Yahoo! intergrates new applications through acquisition instead of through internal innovation. Will be interesting to see the financial disclosure on the deal (if ever). Friendfeed was initially funded with $5 million by Benchmark Capital and its own founders.
Some questions pop to mind:
With the “normal” successful exit for VCs at 10x or more, did they get $50 mln for the deal? If so, did Facebook overpay as Yahoo! has been doing? Wonder if they saw an opening to exit for a few bucks less citing lower chances for long-term success and took it to focus on the next venture?
And speaking of Yahoo! and innovation, Steve Rubel has an interesting thought – make FriendFeed the new “Facebook Labs.” Why not? Seems the right people are in the place…


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