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Facebook and FriendFeed: Best Friends Forever

By Anders Bylund – Updated Apr 6, 2017 at 1:17AM

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Facebook is loading up on top talent before launching an IPO.

Today, social networker extraordinaire Facebook accepted a serious friend request from microblogging channel FriendFeed. In the words of FriendFeed CEO Bret Taylor, "when two companies love each other very much, they form a structured investment vehicle." Awww, that's so sweet.

Facebook plus FriendFeed is a natural pairing, because Facebook and FriendFeed target different corners of the market for online social interaction. FriendFeed's services should blend nicely with its new parent's larger fabric, and might even replace a few of Facebook's most basic features, such as the message wall. Putting the largely unknown but technically impressive FriendFeed technology into the hands of 250 million Facebook users should help bringing out the best in both partners.

We don't have proper financial details on this deal, but the price tag should be relatively small. The Wall Street Journal's usual unnamed sources claim that it's a $15 million cash, $32.5 million stock deal, and those figures sound reasonable. FriendFeed comes with just 12 employees and less than two years of operating history.

But we're talking about some quality folks here. The four co-founders, who will get cushy executive positions at Facebook, all worked at Google (NASDAQ:GOOG) in the early days, where they played big roles in success stories such as Gmail and Google Maps. Short of snagging top engineers directly from Google, Apple (NASDAQ:AAPL), and IBM (NYSE:IBM), this instant brain upgrade is hard to match. From that perspective, this little buyout could pay big dividends when the new talent starts working toward Facebook's goals.

And we already know that those goals include going public. Section 12(g) of the Securities Exchange Act of 1934 demands that a company with more than $1 million in assets and 750 shareholders must register its shares with the SEC within four months. That's tantamount to going public, and that item is widely believed to have hastened Google's entry into the public market.

Facebook has more than 700 employees and is known to dole out stock options to new hires. That 750-shareholder mark can't be far off.

Move over, Google. Clear some space, Amazon.com (NASDAQ:AMZN). Get a room, Microsoft (NASDAQ:MSFT) and Yahoo! (NASDAQ:YHOO). Cyberspace is getting a new stock darling, and Facebook is loading up for an inspired start.

Further Foolishness:

Google is a Motley Fool Rule Breakers selection. Microsoft is a Motley Fool Inside Value pick. Apple and Amazon.com are Motley Fool Stock Advisor picks. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like. The Motley Fool is investors writing for investors.

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