If you've ever wondered why the mainstream media is struggling with making the Internet work for it, the very real possibility that this might go through is proof that the executives don't know a bloody thing about how it works:

Facebook, the Web site where students around the world socialize and swap information, has put itself on the block, BusinessWeek Online has learned. The owners of the privately held company have turned down a $750 million offer and hope to fetch as much as $2 billion in a sale, senior industry executives familiar with the matter say.

Okay, I can actually see this happening for a very good reason that doesn't apply to the trashy MySpace. Facebook is a very tightly-designed product. It has the potential to be pretty useful, but not two billion dollars useful by any reasonable estimate. Still, unlike MySpace, it has several things worth noting:

• Facebook is exclusive. You have to have a .edu email address to sign up for it, something that doesn't apply to MySpace. This automatically filters out most of the prepubescent crap that litters MySpace like a Tornado in a junkyard. It also keeps most of the stalkers out because Facebook goes one step further by making your profile by default inaccessible to those outside your school who you haven't authorized. That also cuts down on the potential base of stalkers dramatically.
• Facebook is targetted. There is no hodge podge of different groups to target. It's pretty much exclusively available to those in college or who have graduated from college. Targetting is very good for advertising, and it helps that college students these days are one of the top niche markets in terms of disposable income.
• Facebook draws from the Google school of user interface design. Light weight, easy to use, intuititive and just simply a straight forward design. Take a look around MySpace and you'll swear that by comparison the guys who designed MySpace had barely cracked a book on proper web application design. Not to mention the fact that most MySpace users don't have the decency to use good templates designed by other people who actually know how to make one (why I used a template I found online for my blog).
• Facebook started with a good design. This is the most important aspect of the whole thing aside from the marketting aspect. MySpace has terrible design and security and will have to graft good design on. Facebook started with a solid user interface and design and is working on that foundation. Most major headaches are the result of bad planning and design, and Facebook is a lot slicker in that respect than MySpace.

As I said, I would never, ever call paying even one hundred megabucks a good price tag for something like this. Show me the profit sheets, show me the growth data, and maybe I'd be willing to pay five to ten times the annual revenue for this web property. Last I heard, MySpace only made around $60M in advertising last year, and they were bought for only $600M or so. Facebook is going to have to find either a really stupid executive or a cash cow to justify $2B.