Microsoft buys stake in Facebook

[Don]

Microsoft has paid $240m for a 1.6% stake in Facebook that values the hugely popular social networking site at $15bn.

Facebook spurned an offer from Microsoft's rival Google, which was also keen to invest the site.

Microsoft will also sell internet ads for Facebook outside the United States as part of the deal that took several weeks of negotiating.

Microsoft already provides banner advertising and links on the US site.

Mark Zuckerberg started the online social networking site in his Harvard University dorm room less than four years ago.

Mr Zuckerberg, 23, has indicated he would like to hold off on an initial public offering for at least two more years.

He rebuffed a $1bn takeover offer from Yahoo last year.

Advertising magnet

Facebook hopes to become an advertising magnet by substantially increasing its current audience of nearly 50 million active users.

Facebook allows users to set up personal web pages and communicate with each other.

Google and Microsoft have crossed horns before for hot Internet properties.

Google beat Microsoft with a $1.65bn acquisition of online video sharing site YouTube last year.

Facebook expects to make a profit of $30m this year so on conventional valuations a $15bn price tag would look expensive.

Source: http://news.bbc.co.uk/2/hi/business/7061042.stm

 

[Kenny]

15 billion.......

 

[Web Master]

$15 billion? Is facebook.com really worth $15 billion?

 

[JamesDavid]

Simple answer..... YES it is worth 15bn.. when a company pays 240million for 1.6% of anything its crazy.

I am thinking about making facebook another offer.... I would like .000000000000000000000000000001% of the company and I will give them everything I am worth...

But part of me thinks that Microsoft could start and boost its own social networking site for less though......

 

[billinchina]

If they paid $240 million, they probably got more value than simply a 1.6% stake in the company. I bet they got a certain amount of advertising space for that as well (or something else like that). I get the feeling that Facebook likes to pretend like they are worth a bunch by selling small amounts of the company bundled with super valuable additionals to give the perception that the company is worth more than it really is.

 

[.jd.]

If they paid $240 million, they probably got more value than simply a 1.6% stake in the company. I bet they got a certain amount of advertising space for that as well (or something else like that). I get the feeling that Facebook likes to pretend like they are worth a bunch by selling small amounts of the company bundled with super valuable additionals to give the perception that the company is worth more than it really is.

That my friend is hype. As long as blogs are talking about it, and teens are hearing of it they will keep where they are. They may only look dominate now, but soon enough facebook will be a new generation of technology and networking.