Facebook Takes Fight to MySpace

Now we know why Facebook refused to put itself up for sale.

You'll recall last September when word spread that Yahoo! (YHOO Quote) wanted to pay up to $1 billion for Facebook, which it saw as its best chance to leapfrog into a leader in social networking after News Corp. bought MySpace for $580 million.

(Later, a spurious rumor emerged that Google had bid $2.3 billion for Facebook.)

Yahoo! would surely have forced Facebook to mate with 360°, Yahoo!'s homegrown social network, and subject it to all sorts of surgery to graft on other Yahoo! properties like Mail and Answers and Flickr.

It would have been great, if costly, for Yahoo! -- 10 million members, most of them in college, imported overnight.

Facebook said no, as it had done in response to other nine-figure bids. Many believed it wanted to remain true to its gated-community spirit. Others thought it had passed on its best chance to cash out. MySpace was still ruling the social-network realm, growing in membership and page views faster than Facebook.

Eight months later, we're starting to see what Facebook had up its sleeve. Last week, it unveiled a new platform for its site -- and it's rich with new potential. It has quietly been building a better MySpace, one focusing its strengths on MySpace's weaknesses.