Microsoft buys 1.6 percent stake in Facebook
updated 05:45 pm EDT, Wed October 24, 2007
MS invests in Facebook
Microsoft has purchased a 1.6 percent stake in Facebook for $240, pegging the four-year-old social networking site's value at $15 billion. As part of the deal, Microsoft will sell online ads for Facebook. The funding will help fuel Facebook's expansion plans prior to an expected initial public offering, which founder Mark Zuckerberg, 23, says he would like to put off for at least two more years. Facebook claims nearly 50 million active users, attracting 30.6 million U.S. visitors during September compared with 68.4 million for the other social networking giant, MySpace. The investment is the culmination of a feud between Google and Microsoft, who were both actively seeking to push capital into the young Internet firm.
Competing interest was spurred by Microsoft's intent to beat Google in the advertising space, the insiders explained. After Google declared its intent to buy web ad agency DoubleClick this year, Microsoft promptly responded by purchasing rival group aQuantive in an attempt to gain a similar level of clout. Facebook has reportedly developed its own ad system that would float context-sensitive ads based on a member's profile and habits. According to the Associated Press, in its fiscal year ending in June, Microsoft's online ad revenue rose 21 percent to $1.84 billion; over the same period, Google's ad revenue totaled $13.3 billion.
Google has refused to specifically comment on Facebook negotiations.
Sad news
10/24, 06:08pm reply
Am cancelling my facebook account immediately because I don't trust Microsoft.
just a poster
Fresh-Faced Recruit
Joined: Jun 2004
$240?
10/24, 08:12pm reply
"Microsoft has purchased a 1.6 percent stake in Facebook for $240, pegging the four-year-old social networking site's value at $15 billion."
I assume there's a multiplier missing there.
infobhan
Fresh-Faced Recruit
Joined: Jan 2003
Faustian
10/24, 09:13pm reply
It starts oh so subtle, oh so slow. Then before you know, you've made the deal, and sold your soul to the devil.
Facebook. Soon to be Face (the way we say your face should be) book
Doofuses.
robttwo
Fresh-Faced Recruit
Joined: Nov 2005
Hopefully
10/24, 10:17pm reply
Microsoft is only investing and not intending to change Facebook otherwise you will see a quick departure of first wave adopters.
legacyb4
Mac Elite
Joined: May 2001
Bye Bye
10/24, 10:45pm reply
What a bunch of idiots. Just when you think there's an intelligent person running Facebook; you get such a moronic action.
jarod
Fresh-Faced Recruit
Joined: Apr 2005
What?
10/25, 03:03am reply
What’s a “Facebook”
I seem to have overlooked this website...
CVB
cvbcvb
Fresh-Faced Recruit
Joined: Nov 2003
There was Hotmail
10/25, 04:37am reply
I wont be surprised if the same happens to Facebook as well. Microsoft takes it up, makes it all weird and strange.
And we all have the option (again) to create another one. And the $240, needs some thinking.
Guest
Fresh-Faced Recruit
Joined: Nov 1999
notional value...
10/25, 06:10am reply
A clever move by Microsoft that places a notional and far from real value on Facebook that makes acquisition by others more problematic, financially and in terms of the fact that the well has now been poisoned by a minute quantity of M$ dollars. Bad, bad move by Facebook, guess they must have been desperate for hard cash which suggests the company is really worth far less than $15 billion (or whatever). Considering how deep M$ pockets are (having blown almost $5 billion to date on Xbox strategy), this amount of money is a joke that must have Bill & Steve (Ballmer) laughing out loud. Mark Zuckerberg has shown himself to be anything but a smart businessman, a seriously ironic loss of face!
Feathers
Forum Regular
Joined: Oct 1999
USD:240 million
10/25, 08:29am reply
Must be USD:240 million, right? That's 1.6% of USD:15 billion.
Clive
Mac Enthusiast
Joined: Jan 2001
c***
10/25, 12:18pm reply
Yeah, if hotmail is any indication, facebook will go all crappy and weird.
apple4ever
Fresh-Faced Recruit
Joined: Jan 2001