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Microsoft buys a $240 million piece of Facebook
It looks like Microsoft has beat out Google in the bidding war over a stake in Facebook. But while we had been hearing that Microsoft had been looking for a 5-10% stake in the $300-$500 million range, the company is instead spending $240 million on a 1.6% stake in Facebook.The deal gives Facebook a valuation of $15 billion, even though the company only made about $150 million in revenue this year.
OK, enough with the numbers. What does the deal mean? Microsoft will sell advertisements that show up on Facebook outside of the US. The two companies will share the revenue from those ads. Microsoft is already selling ad space for Facebook in the US.
And what does Facebook get out of the deal? A boatload of cash. Oh, and the ability to hire new workers, expand in more countries, and work on their own advertising system.
Comments
13
Subscribe to commentsJoshOct 24th 2007 7:44PM
Yeah...I really dislike this. That's the last thing we need to see is the beginnings of yet another crappy Windows Live service. Just watch Microsoft start buying up more and more of Facebook and make that the new Spaces or whatever the hell they call it now. Virb here I come. =\
SamOct 25th 2007 8:05AM
Woohoo Microsoft!
Now thousands of college and high-school kids on Apple laptops can look at Facebook with advertisements for Windows Server and Office Enterprise!
BananaBoatOct 25th 2007 8:01AM
Somewhere out there, Kevin Rose is salivating, just waiting for it to be Digg's turn.
Personally I think buying a web 2.0 company is a waste. Just another website to put your ads on.
FOELONGOct 25th 2007 8:03AM
I VOTE ITS A WASTE TOO. WASTE
FOELONGOct 25th 2007 8:03AM
$240 mil should've bought at least 50% of facebook.
michaelOct 25th 2007 8:03AM
@Josh - yeah, like Microsoft's the only one that messes up acquired websites. Look at YouTube, Google bought it, and it's still the same trashy, low-res video site ever. Glad to know how stringent YouTube video uploading is.
And crappy Windows Live services? Have you even used them lately? Another bigot who tries to pretend about companies being this and that.
@Sam : Yeah, have you seen Microsoft's ads? Oh wait, they look just like any other web ad service. Really, in fact, Microsoft also uses Google's DoubleClick for banner and square ads if you didn't know. adCenter ain't Microsoft controlled you know.
AT least, this is better than Google getting a stake in Facebook. I bet if they did, Google would probably index more people into their servers, and keep track of us all for the CIA. I definitely want my privacy in view for Google.
Plus Google has it's already fair share of top websites. Google controlling a whole market is scary enough. At least Microsoft getting a stake in Facebook evens things out. Y! has Flickr and a few other sites to keep that in balance too.
This is great news.
MysteriusOct 25th 2007 8:04AM
While Google is commonly seen as the dominant force on the web, it's position is still far from invulnerable. Microsoft's undermining has just begun, and they've already made a noticeable dent in Google's growth, if some quiet estimates are to be believed. I'm afraid that all the people currently rooting for Microsoft (who would have believed that even a year ago?) will regret it someday if Microsoft cuts Google down to size and steals Google's position on top of the web. Is that what you really want?
As for privacy, I'd trust Google over Microsoft any day. I'd like to see a shred of evidence for your assertions that Google would likely "index people" and turn over data to the CIA, and your implication that Microsoft does better. Every article and fact I've read points squarely to the opposite conclusion.
Luc LegayOct 25th 2007 8:04AM
So, if the valuation of Facebook is now of $15 billion, my own account, one of the 40 millions, had a value of $375… Humm… how they will get this money back from me ?
SamOct 25th 2007 8:05AM
@ michael-i was being sarcastic, i know how M$ does advertising.
michaelOct 25th 2007 4:44PM
@Mysterius:
Take a look at the official website: http://masterplanthemovie.com/
Or just the video itself: http://video.msn.com/video.aspx?vid=28a58f90-8e0b-4da8-a6fc-da68ac846154
There you go :)
lifehackerOct 25th 2007 5:00PM
This guy's selling his facebook account for even less than $300:
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=130167152337
MysteriusOct 25th 2007 5:21PM
@Michael: Seriously? While I haven't had the chance to watch the full movie yet, their textual version fails to impress. The only credible (as in based on more than pure speculation) accusation I see in the text is the assertion that Google has a close relationship with the CIA. Even that seems to be based upon weak evidence.
I recommend reading the book they claim to have based the movie on (The Google Story) before coming back to discuss your beliefs regarding Google with me.
michaelOct 25th 2007 8:14PM
@Mysterius:
Well it's not just me and the website that thinks this. Tons of analysts have that type of suspicion as well. I've seen it from time to time appear on a few credible news sites. "Do you want Google to know about you?" "Google - Big Brother on the web?" and all that.
Of course analysts don't care, they're just in it for the money.
If Google's adSense taps into your computer via Google Desktop, or Firefox, or your Gmail, don't be surprised that it might use that info. beyond for the "sake of ads".
As far as I know, Microsoft isn't doing such a thing that taps into privacy at all.