As Facebook founder Mark Zuckerberg contemplates a big Microsoft deal, the Wall Street Journal’s Dennis K. Berman has a cautionary tale for him: GeoCities. The web community, once the third-most-visited site on the internet, fell into obscurity after Yahoo's huge buyout stymied its innovation. That’s relevant for Zuckerberg, who has already spurned one major, though smaller, buyout offer.
“Had they done things right with GeoCities, there would be no Facebook, YouTube or MySpace,” says an insider. Instead, Yahoo focused on building traffic rather than improving the user experience. Even if Facebook is currently valued at around $10 billion, it needs capital and faces big monetization challenges. Berman suggests Zuckerberg take the private investment but maintain creative freedom.