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Microsoft buys a $240 million piece of Facebook

FacebookIt 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.

Tags: deals, facebook, investment

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