updated 01:45 pm EDT, Wed May 7, 2008
MS Toys with Facebook Buy
Microsoft has been exploring the possibility of buying out Facebook, journalist Kara Swisher claims. Her report cites sources who allege that Microsoft is delivering "subtle signals" to the social network via bankers to gauge if the company is interested in a takeover. No talks have been reported between the two, though some at the companies believe Facebook is likely to remain on its current track to becoming a publicly traded company rather than accepting a private deal.
The two companies are already connected through Microsoft's $240 million investment in Facebook, which lets the former sell some of its online advertising through Facebook's pages. A buyout would give Microsoft complete control over the site's advertising system and significantly increase the exposure of Microsoft's ads on the web, which would increase the company's odds of competing against Google after backing out of its Yahoo bid this weekend.
Microsoft has also been rumored to have a short list of other web-focused companies it may buy in an attempt to increase its advertising share, including Digg or Meebo.