WaPo chief's Facebook board seat a $2 billion consolation prize
Don Graham, the Washington Post CEO, has joined Facebook's board of directors. Had he not been such a nice guy, he might have had the gig three years ago.
Facebook's flacks are portraying the appointment as a sign of the maturation of the unruly social network launched in a college dorm. But Zuckerberg and Graham first met in 2005, introduced by a Harvard classmate of Zuckerberg's who worked at the Washington Post, according to Once You're Lucky, Twice You're Good, Sarah Lacy's swiftly fossilizing history of Web 2.0. (The tale does not seem to be well known; Washingtonian reported on the existence of Graham's Facebook page with smirking surprise last year.)
Graham had reached an agreement in principle with Zuckerberg to invest millions of dollars in Facebook, valuing the startup at $40 million. But Accel Partners, a well-known Silicon Valley venture-capital firm swooped in and offered to invest $15 million for 15 percent of the company, a much better deal.
Zuckerberg felt honor-bound to ask Graham for permission to take Accel's money, Lacy reported. "I release you from your moral dilemma," Graham told him. It was a costly decision for the Post, which might now have a stake theoretically valued in the billions of dollars, going by the price Microsoft paid for its $240 million stake in Facebook. Now, Graham will be serving on Facebook's board alongside Accel partner Jim Breyer, whose firm reaped the benefit instead. No hard feelings: The two are Facebook friends.