Will Yahoo's stock price kill acquisition of Facebook? Facebook IPO?

Yahoo has been in talks to acquire the college social networking site, Facebook, for up to $1 billion, according to the WSJ.

But the article doesn’t raise the obvious question about Yahoo’s plunging stock price, and what that will mean for the deal’s chances. If you read the piece, it goes into detail about Yahoo’s talks with Facebook earlier this year, and how Yahoo’s acquisition offer at one point dropped by $200M to $800M when Yahoo’s stock price dropped. Now that Yahoo’s price has come under even more pressure over the past few days, it’ll be interesting to see if Yahoo can stomach the $1 billion being talked about.

Moreover, Microsoft has been interested too. Facebook apparently asked Microsoft for $2 billion earlier this year, but Microsoft rejected the request, according to the piece. So another question is whether Facebook will accept $1B from Yahoo.

Also, the WSJ has more info on Facebook’s revenues, which look to be enough to take it public.

“I would never say that at no point in the future would we go public or become part of a larger company…but what I would say is, it’s not our priority,” [CEO Mark] Zuckerberg says. “There’s so much more to do here.” People familiar with the matter say Mr. Zuckerberg holds a roughly 30% stake in the closely held Palo Alto, Calif., start-up business…

Based on online ad sales, Facebook will likely soon top $100 million in annual revenue, say people familiar with the matter. That is a level now considered the minimum for a high-technology initial public offering in today’s difficult Wall Street environment for small-stock offerings.

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