CC#10: RUMOR - Facebook in talks to acquire clubhouse

Why did Mark Zuckerberg make a cameo on a quickly growing competitor's platform?

First—I must start by saying that this did not occur to me even for a second. However, as I was getting ready for bed, I joined a room titled Tech Tea and boy was there some good tea being spilled. Many of the thoughts shared below came from different individuals who were in this room.

Here’s the deal: it is highly likely that Mark Zuckerberg has already been in talks with Paul & Rohan, co-founders of clubhouse about an acquisition. In fact, it’s very possible that he has already made an offer. Here are the reasons why:

  1. Last week we saw clubhouse be leveraged as a media/PR arm for a16z portfolio company Robinhood. That’s right, a16z, the lead investor in clubhouse, is also an investor in Robinhood—who is currently under scrutiny after blocking users from buying specific stocks last week. The GOOD TIME show managed to pull Elon Musk as a guest speaker less than week ago and randomly had Elon interview Vlad, the CEO of Robinhood. Here’s what’s interesting: a16z is ALSO an investor in Facebook (as well as Oculus, Instagram & Zynga - who were all acquired by Facebook). But wait, it get’s even better. The GOOD TIME show is hosted almost every night by Sriram Krishnan and Aarthi Ramamurthy. Marc Andreessen, the founder of a16z (Andreessen-Horowitz) is almost always on the stage for the show and often participates. Suddenly, last night we saw Marc Andreessen announce that Sriram will be joining a16z as the latest General Partner.

  2. Mark Zuckerberg is typically very aggressive when it comes to competition. He is not active on Twitter, he is not a snapchat user, so why would he make a cameo on clubhouse, a quickly growing competitor to Facebook? To put more pressure on Mark, Twitter recently launched ‘Spaces’ - a direct competitor to clubhouse. It just doesn’t add up unless Facebook has already made an offer to clubhouse.

  3. Facebook is already under scrutiny for violating anti-trust laws and engaging in monopolistic behavior. They would need to move fast on this deal otherwise the FTC and regulators might interfere and prevent the deal from happening. When Facebook acquired Instagram, it only had 30 million users, 13 employees and zero revenue. By comparison, clubhouse is around ~5 million users, had only 9 employees as of last week and zero revenue. In addition, Zuck attempted to buy SnapChat in 2013 for $3b and was turned down by Evan Spiegel. There’s a lot of reason to believe he would want to move in on clubhouse as soon as possible.

  4. Why did clubhouse only have 9 employees as of last week? This platform is growing so fast, you would think they would need a team of 30+ to keep up with it. However, if they were in talks about a Facebook acquisition, they would purposely avoid this for 2 reasons: less dilution for share-holders (often times, early employees get pretty good stock-option packages as part of compensation) and there’s no need to recruit if Facebook can reassign 30-50 employees to clubhouse as soon as the acquisition takes place.

    What I’m wondering—and probably you are too after reading this—is how much would Facebook pay for clubhouse? My guess is somewhere between $6-$8 billion.

    What do you think? 4D chess by Zuck or just a conspiracy?

    My other question is, if this does take place, how will it affect clubhouse? Would you be concerned about data privacy/security, or the platform growing too fast and losing its spark? How do you believe clubhouse would be impacted if Facebook were to acquire it tomorrow?

    This entire article is speculation, but it also might be reality. After all, Facebook has been known to mess with people’s perception in the past. And isn’t perception the same thing as reality?