Thiel remembers Zuckerberg saying no to 1 Billion

Peter Thiel remembers when Mark Zuckerberg turned down $1B

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Peter Thiel took to the stage at South by Southwest to recount the day Mark Zuckerberg turned down Yahoo's $1 billion offer for Facebook, despite doubters Thiel and Jim Breyer.

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by Kent Bernhard Jr, Upstart Business Journal March 13, 2013 | 1:48pm EDT

Great entrepreneurs think differently than the rest of us, Peter Thiel said at SXSW 2013. Case in point, Mark Zuckerberg, whom Thiel backed before anybody else and who once turned down a $1 billion buyout offer from Yahoo.
"The most successful businesses have an idea for the future that's very different from the present—and that's not fully valued," Thiel said Tuesday, the last day of the interactive portion of the annual music, film and interactive festival in Austin, Texas. That, he said, is what happened in July 2006, when Yahoo came knocking with a $1 billion offer for Facebook, Allison Fass of Inc. reports.
Thiel recounted the tale:

At the time, Facebook was just two years old. It was a college site with roughly eight or nine million people on it. And, though it was making $30 million in revenue, it was not profitable. "And we received an acquisition offer from Yahoo for $1 billion," Thiel said.

The three-person Facebook board at the time—Zuckerberg, Thiel, and venture capitalist Jim Breyer—met on a Monday morning.

"Both Briar and myself on balance thought we probably should take the money," recalled Thiel. "But Zuckerberg started the meeting like, 'This is kind of a formality, just a quick board meeting, it shouldn't take more than 10 minutes. We're obviously not going to sell here'."

At the time, Zuckerberg was 22 years old.

The way Thiel remembered it, Zuckerberg saw a future value to Facebook (Nasdaq: FB) that went way beyond the amount Yahoo had put on the table or Yahoo's plans for the company, and he was right. Facebook's market capitalization at the close Tuesday was $66.29 billion.
Thiel, who thought the board should at least consider the offer from Yahoo, could console himself with the fact that eBay and Google had previously turned down $1 billion offers from Yahoo. Now, of course, Thiel and those others who were in on Facebook early can laugh all the way to the bank, thanks to Zuckerberg.

Kent Bernhard Jr, Upstart Business Journal

Since coming aboard with Upstart’s parent company, Kent has covered sustainability and business, entrepreneurs, technology, and venture capital. Now, he covers all the ways upstart businesses get their money.