Could Facebook Buy Loopt?

When Facebook’s recent acquisition of Twitter failed, many questioned why the company would turn down $500 million in Facebook stock options. While the actual valuation amounted to $100 – $130 million, Facebook was clearly looking to acquire a company which would instantly bolster their presence while removing a potential competitor from the social networking space. Thomas Ramussen of the 451 Group, suggests that another potential acquisition is Loopt.

The logic for such an acquisition is a little bit foggy. The main reason that an acquisition doesn’t make sense is that the demand for simple location-based services haven’t really spiked with the release of the iPhone. While there are some great examples of location integration, the location based social networks don’t appear to be booming.

When iTunes released their top applications of 2008 recently, Facebook was number two on the list and MySpace took the thirteenth position. Where was Loopt on the list? They weren’t. Location based services integrated into Facebook makes a lot of sense and considering Loopt’s expertise on the topic, an acquisition wouldn’t be the worst thing in the world but does it warrant $100 million (the amount the 451 M&A knowledge base values the company)?

I’m not quite sure but back in November Mike Arrington suggested that Loopt was possibly looking to sell the company. Since then, the company has experienced muted fanfare from the iPhone community, continuing to decrease their potential acquisition price. Facebook definitely has an interest in location-based services but does getting into the space warrant an acquisition?