The news is confirmed: Telefónica has bought 85% of Tuenti, Spain’s second largest social network, for €70 million. This means that each of its 8 million users has a value of 9 euros, which is around 3 times less than what a Facebook user costs. So why did Telefónica buy this social network and how was the price decided?

Several reasons have been reported:
– Some owners of Tuenti were not very well together. CEO Zaryn Dentzen would not talk at all with board member Borja Pérez, who represents its main shareholder, Spanish media group Prisa.
– Tuenti wants to base its business on local mobile services, an area in which a telecoms operator has a lot to help.
– The Latin American market, in which Telefónica is the leading ISP, is the natural expansion market for Tuenti. Telefónica buying Brazilian mobile operator Vivo is also very important for this goal.
– Telefónica wants to have a big mobile social network for its younger users, as it already tried with Keteke.

About the amount:
– Media think the price was low, but Tuenti’s medium user is a teenager or univerity student with a short purchasing capacity.
– Tuenti focuses in Spain so there are not so many potential buyers.
– Tuenti’s internal problems have been reported to have pushed many shareholders to a fast sale.
– Tuenti’s managers wanted an exit. In fact, one of the main Spanish bloggers thinks that the ones left at the company, though keeping 15% of the shares, will not last too long.