“Yahoo clearly wants a seat on the social-networking train. But how much should it spend for a ticket?”

Yahoo’s growth has been halted by Google, the fastest growing search engine dominating the market. There are many reasons why Google is becoming more popular everyday. Google offers many web applications that Yahoo does not. Google also owns a social networking website, Orkut, and Yahoo still doesn’t have one after attempting to acquire Facebook for $1 billion dollars last year.

Based on some fairly rough assumptions - Facebook, as a private company, doesn’t disclose financial figures. Facebook could be worth between $5 billion and $6 billion to a potential buyer. - Robert Peck of Bear Stearns

Robert Peck is urging Yahoo to not give up on Facebook. Yahoo only reported $2.3 billion in cash and marketable securities in the last quarter. However, Yahoo has over $30 billion in stock it could use as currency. Since Facebook decided to let non-college students join, they’ve experienced a surge in visitors. With Facebook’s recent success in gaining more popularity over the other popular social networking website Myspace, Facebook should look even more desirable to Yahoo. The acquisition of Facebook could put Yahoo back to the frontlines against Google.

[via NYTimes]

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