Is Yahoo! Really Buying FourSqaure?

FourSquareFourSquare, the popular location-based social network, is probably only rivaled by Twitter when it comes to growth in early years. With millions of users checking-in daily, it is the hottest property around. BusinessInsider reports that Yahoo! deal-makers are talking about buying FourSqaure for $100 Million. The story which is quite vague on details reads

“Yahoo’s M&A deal-makers are deciding right now whether or not to buy super-hot location-based startup Foursquare for ~$100 million, says a source close to bankers involved in Foursquare’s current fund-raising efforts.”

But with some of the biggest VCs (Khosla and Accel) fighting to invest in FourSqaure at a valuation of $80 Million, the sale price of $100 Million doesn’t sound a really good deal. Moreover, with no comments from Dennis Crowley, FourSqaure founder, or Yahoo!, it seems more probable that the whole deal is just an effort by the investment bankers to sweeten the $80 Million valuation.

Dennis Crowley’s first project was Dodgeball, a Twitter-like service that was bought by Google in 2005. Dennis claims he only sold it because of the lack of funding. This, however, isn’t the case with FourSqaure and with the current growth and popularity FourSqaure enjoys, the deal would be a very cheap bargain for Yahoo! but a very unfortunate one for Dennis.

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