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Through history, there have been many Internet companies that have shied away from millions—even billions—of dollars thrown at its doorstep by larger corporations with hopes of acquiring a hot new property. Some turned out just fine without the infusion of money, while others would have benefited from being bought. Even Facebook, which had the biggest IPO in Internet history, was once courted by Microsoft. Luckily, Zuckerberg new better and waited it out. Check out 10 Internet companies that turned down huge buyouts and decide for yourself which one was wildin' and which one was smart.
Popcap
Year(s): 2002, 2011
Buyout offer: $5 million from Microsoft, $1 billion from Zynga
What happened: In PopCap'ss early days, the video game maker had a sit down with Microsoft where the tech behemoth explained to the new company why it was worth $5 million. PopCap chuckled and politely declined the offer. Nine years and multiple hit games later, Electronic Arts nabbed PopCap for $650 million. But only after Zynga tried to buy it for $1 billion in cash. Sounds silly, right? Yes, until you look at the EA deal which also included $100 million in stock and a $550 million bonus based on its two-year performance, totaling $1.3 billion. Not bad.
Yelp
Year: 2010
Buyout offer: $140 million from Facebook
What happened: At one point, everyone wanted to buy Foursquare. Microsoft was interested; rumors of Yahoo! putting together a $100 million offer were spreading; Facebook wanted to bring it into the fold. All the companies were turned down, of course, but things got interesting at the Le Web 10 conference when Foursquare CEO Dennis Crowley confirmed, in so many words, that Facebook wanted to spend around $140 million on the check-in service. After the talks ended, Foursquare raised $20 million in financing, and Facebook launched its own check-in service.
Path
Year:: 2010
Buyout offer: $100 million from Google
What happened: Started by former Facebook employee, Dave Morin, Path allows people to create mini social networks comprised of only 50 friends. It's goal is to let its users share their lives with their closest of friends and family. For that reason, it's still very small, but its users are very active with 20% of its user base using the service daily. When Path's execs met with venture capitalist firm Kleiner Perkins and Index Ventures, Google decided to decided to attack, offering$100 million with a $25 million earnout. The company turned down the offer and decided to take a round of private investments instead, raising $8.5 million.
Foursquare
Year: 2010
Buyout offer: $140 million from Facebook
What happened: At one point, everyone wanted to buy Foursquare. Microsoft was interested; rumors of Yahoo! putting together a $100 million offer were spreading; Facebook wanted to bring it into the fold. All the companies were turned down, of course, but things got interesting at the Le Web 10 conference when Foursquare CEO Dennis Crowley confirmed, in so many words, that Facebook wanted to spend around $140 million on the check-in service. After the talks ended, Foursquare raised $20 million in financing, and Facebook launched its own check-in service.
Color
Year: 2011
Buyout offer: $200 million from Google
What happened: Before Color, a location-based social network started by former La La Media co-founder Bill Nguyen, launched, Google expressed interest in the technology and the development team and tossed a buyout offer of $200 million their way. Color turned down the dough, opting instead to raise $41 million from venture capital firms Bain, Sequoia Capital, and Silicon Valley Bank, which valued the company at $167 million. Since then, the company has gone through two relaunches and has rebranded itself as an app that lives on top of Facebook and allows people to share video on their mobile phones. Nguyen should have took the money.
Year: 2
Buyout offer: $2 billion from Facebook, $10 billion from Google
What happened: According to a Fortune magazine piece, the micro-blogging service turned down two billion-dollar offers from Facebook and Google. Many, including Twitter's board, were puzzled by the decision. However, since then, Twitter has raised $800 million in what was the largest venture round in history. Despite its revenue being only in the tens of millions and lack of a strong business model, the four-year-old company is now valued at $8 billion. Sources say it's preparing to go public in 2013.
Dropbox
Year: 2009
Buyout offer: $800 million from Apple
What happened: After Drew Houston, a young MIT graduated, managed to get his nascent product cloud storage product to work seamlessly with Apple's file system, Steve Jobs took immediate notice. He invited Houston and his partner, Arash Ferdowsi, to Cupertino where he tried to convince the duo to sell. According to Houston, Jobs said Dropbox was a "feature, not a product", and that Apple was planning on entering that market. Houston and Ferdowsi declined Jobs offer. Shortly after, Apple released its Dropbox competitor, iCloud. Don't feel too bad for the Dropbox dudes-in 2011, after a venture capital round that raised $257.2 million, the company was valued near $1 billion, with analysts saying it could very well rise in the future to $5 billion.
Groupon
Year: 2010
Buyout offer: $6 billion from Google
What happened: Groupon was the darling of the tech world two years ago when Google offered to purchase the group-buying web service for $5.3 billion with a $700 million earn out. The Chicago-based company decided it could do better on its own and turned down deal that would make its three co-founders instant billionaires. A year later Groupon raised $700 million during its intitial public offering which raised the company's valuation to $12.8 billion.
Year: 2007
Buyout offer: $15 billion from Microsoft
What happened: At a Paris tech conference in December of 2010, a Microsoft executive told reporters that three years earlier, Steve Ballmer offered to buy the social network for $15 billion. Why? According to the executive, the company reminded Ballmer of the way Microsoft used to be back in the day (we assume that's a compliment). When Zuckerberg turned down the money, Microsoft countered with a $240 million investment for a minor stake in the company. You know the rest of the story: Facebook became the biggest social network in history with over 700 million registered users; it brings in $2 billion in revenue each year; and is now worth $100 billion after its IPO.
Yahoo!
Year: 2008
Buyout Offer: $44.6 billion from Microsoft
What happened: Before Microsoft launched its Bing search engine, the giant from Redmond, Wash. wanted to buy the ailing search company turned web portal Yahoo! In an unsolicited bid, Microsoft offered to buy the company for $44.6 billion. Yahoo! turned it down saying that it "substantially undervalues" the company. Two years later, after creating its own search engine, Microsoft struck a 10-year deal with Yahoo! that would have Bing powering Yahoo!'s search. Funny how things work out.