Face.com Is Definitely Being Acquired By Facebook Say Sources
The purchase of Face.com by Facebook is happening and is a done deal, say multiple TechCrunch sources. — Those familiar with the matter have confirmed the price will be $100m, as per the media speculation in the last few days.
Context & Ripple Effects
TechCrunch's sourcing lands three weeks into Facebook's life as a public company under strain: shares have dipped below $29 since options trading began, roughly $35 billion of market value has evaporated since the IPO-era speculation about who would own or be owned by Facebook has fully inverted, and the company is refusing big-spending advertisers like GM who want ads that interrupt the feed.
Against that backdrop, the report that a $100m purchase of face-recognition developer Face.com is a done deal — still unconfirmed by either company, per the sourcing — shows Facebook spending through the dip on technology that touches its core photo product. It sits alongside the same-day report of Salesforce set to pay more than $800 million for Facebook marketing partner Buddy Media, evidence that the post-IPO window has opened a broader round of social-M&A repricing. The pickup across PC World, PC Magazine, Business Insider, Digital Trends and four other outlets within a day marks this as one of the most-widely syndicated deal rumors of the moment.
First-order effects
- Face.com's team and its facial-recognition API move toward Facebook ownership at a rumored $100m, folding third-party photo-tagging technology into Facebook's own photo infrastructure before any official announcement exists.
Second-order effects
- Developers who built on Face.com's public API face uncertainty about whether access survives absorption into Facebook, while rival platforms are pushed to secure their own computer-vision talent rather than depend on a soon-to-be-captive supplier.
Third-order effects
- If the pattern holds, core perception technologies like face recognition consolidate inside the largest social platforms rather than remaining independent middleware vendors, raising the privacy stakes regulators will eventually have to weigh.
The trend: Post-IPO Facebook is converting its cash into control of the underlying technologies of its product — photos, tagging, identity — even as its market value shrinks.