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. So far Face.com itself has declined to comment. CEO Gil Hirsch told us via email today “I have nothing to announce.” However, among our sources, one told us “Yes, the wheels are in motion on the deal”. We understand lawyers are huddling over the details of the deal right now but the acquisition is agreed.
Now, whether Moscow-based search engine Yandex is selling its stake in the Israeli company to Facebook instead of this being an outright acquisition remains only one outstanding detail that has not yet been confirmed. Yandex, together with Israeli investment fund Rhodium, put $4.3 million into Face.com in return for 18.4 percent of the company. Yandex CEO, Arkady Volozh, joined Face.com’s board of directors, according to Vedomosti, as picked up by GigaOm. Vedomosti has sources that say Yandex wants cash and stock in Facebook in return for the deal.
We’ve already outlined how much sense this deal makes.
But CEO Gil Hirsch is a canny player and would have waited for the IPO before calling for his price. It looks like he got it.
To review: the facts on the ground to date are:
• Israeli business publication Calcalist first reported (in Hebrew) that Facebook was looking to purchase Face.com.
• The deal size has been put at $80 million and $100 million. We’re calling it at $100m.
• Face.com’s technology is a natural acquisition target for Facebook. Photos are core to Facebook’s lock-in strategy and facial recognition allows tags to better reflect the social graph, which then feeds into making its advertising platform more efficient.
• There is evidence the two companies have been talking for some time (after all, Face.com appeared in 2007) but a price was never agreed until now. A post-IPO Facebook can now afford it.
• Face.com’s popular Facebook application Photo Tagger allows people to scan their (or their friends’) photo albums for known faces. It also has the iOS facial recognition app KLIK and a public API that could benefit Facebook.
• Facebook’s own camera app could integrate the Face.com API.
• Face.com has so far raised $5.3 million from Yandex and Rhodium
Face.com is helping people find photos, using our home grown best-in-breed facial recognition technologies. The first deployment of our tech is our Photo Finder application for Facebook, today’s largest photo sharing site, which scans public photos in your social network and suggests tags for untagged faces. face.com has offices in Tel Aviv and New York.