Will "do you Yahoo!?" replace "What's your major?" as the ultimate coed pickup line? Today's Wall Street Journal had a front-page story on a quiet buyout battle brewing for the college-friendly social networking site Facebook.
Citing "people familiar with the matter," the article reveals that the company has been in acqusition talks with Microsoft
This would be another crushing blow for Microsoft. It had struck a deal with the site to feature its ads on Facebook's pages. It was one of the meatiest content site pacts to be secured by Microsoft since the launch of its adCenter platform. If Yahoo! snaps up Facebook, you can be sure Mr. Softy is going to be shut out. This follows the software giant's heartbreak last year, when it made overtures for AOL to help grow its billable ad space until Google
As far as exit strategies go, you couldn't blame Facebook for wanting out. It has suffered from recent miscues that triggered privacy concerns, as well as fears that it would be diluting its ivory-tower pedigree for the pursuit of a wider audience.
Yahoo! would be a capable suitor, since it already runs social bookmarking site del.icio.us, has a proven online chat platform, and just happens to run one of the Internet's most popular dating sites.
The only question that remains is whether mighty Microsoft is going to let Yahoo! walk away with Facebook. Microsoft should never have to overpay for a deal, but it may want to consider jumping back into the bidding war. Not only can it use the college-kid traffic, but it also needs to send a message to investors that it is taking the land-grab game seriously.
Sure, Viacom can save some face with Facebook, too. The company just lost its CEO because it had failed to position itself with investors as an attractive destination for the MTV generation it once created.
So despite its communication blunders lately, Facebook may be the one to get the last laugh as it plays some pretty desperate bidders against one another. It's good to be Facebook, for a change.
Microsoft is an Inside Value recommendation and Yahoo! is an active Motley Fool Stock Advisor pick.
Longtime Fool contributor Rick Munarriz always enjoys a little tension at weddings. He does not own shares in any of the companies mentioned in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. T he Fool has a disclosure policy.
