Facebook Slurps Up FriendFeed

In a continuing bid to make itself ever more relevant to advertisers and open its doors to the broader Internet, Facebook has acquired social media aggregator FriendFeed.

Terms were not disclosed, but The Wall Street Journal -- citing anonymous sources -- valued the deal at US$50 million in cash and stock.

The move comes as Facebook has begun to open itself up to the broader Internet, giving users vanity URLs for their profiles and making them more searchable on the Web.

FriendFeed Background

Founded in 2007 by four former Google (Nasdaq: GOOG) developers, the FriendFeed service allows users to build customized feeds based on information they find and activities they engage in on the Web and other social media sites, including YouTube and Twitter. Users' friends can then see those feeds in real-time.

FriendFeed is a relatively minor phenomenon among mainstream Web users, but it is highly popular with early technology and social media adopters, Jeremiah Owyang, a social media analyst for Forrester, told TechNewsWorld. The site gets about 1 million unique visitors a month, a paltry sum compared to Facebook's 250 million visitors, Owyang said.

"These are the uber social geeks," he said.

Integrating the Services

Integrating the services opens up new avenues for Facebook to appeal to advertisers, and it also gives the company a competitive edge against Twitter, because tweets will be viewable directly on Facebook's platform once the integration is complete.

FriendFeed's services, while simpler to use than Facebook's, can be more daunting to set up, said Owyang, who is active in the FriendFeed community.

Facebook developers will likely make FriendFeed's services more easily configurable, he said, while retaining the ease of day-to-day use to encourage adoption among the site's millions of mainstream users.

Facebook Mum

Facebook spokesperson Larry Yu told TechNewsWorld that work on ideas to integrate the two services is under way, but said it's too early to discuss exactly how that will play out publicly. He also declined to discuss The Wall Street Journal's purchase estimate, which placed the sales price at $15 million in cash and roughly $32.5 million in stock, based on Facebook's value imputed from Digital Sky Technologies' recent investment in the company.

FriendFeed will continue to operate "normally for the time being," wrote FriendFeed cofounder Bret Taylor on the company's blog.

"We're still figuring out our longer-term plans for the product with the Facebook team," he said.

Good Move for Facebook

The move is a clear win for Facebook, Owyang said. Not only does Facebook get complementary technology, it also gets four top-notch developers.

FriendFeed's four founders -- Bret Taylor, Paul Buchheit, Jim Norris and Sanjeev Singh -- are former Google developers; they will take on senior roles on Facebook's engineering and product teams, according to the companies.

Taylor was the group manager behind Google's Maps product. Buchheit was the product engineer for Gmail and originated Google's "Don't Be Evil" motto, according to the companies.

The acquisition also improves Facebook's competitive posture among social media companies, according to Owyang. It shuts out Twitter, MySpace and Microsoft (Nasdaq: MSFT), all of which could have purchased FriendFeed to compete against Facebook.

"I think this is a good move for Facebook," said Owyang. FriendFeed, however, may have sold too soon.

"They could have given it a couple more years. With some marketing , they could have developed into a viable social media competitor," he said.