Posted by Bezhou Feng on 24 October 2007 - 22:56 · 24 comments & 17167 views
Microsoft Corp., a company which needs no introduction, beat out rival Google Inc. on Wednesday in a battle to invest in socializing Web site Facebook, agreeing to pay $240 million for a roughly 1.6 percent stake in the Web phenomenon and expand a deal to sell advertising. Microsoft and Facebook stated that the $240 million investment valued Facebook at $15 billion, which analysts said was a steep price and a bet the young company would be able to transform itself into a hub for all sorts of Web activity. "The only way this works is if Facebook becomes sort of the users' operating system on the Internet -- everyone logs into Facebook every day to get in contact with their friends and use a multitude of future applications that will be developed for it," said Morningstar analyst Toan Tran.

Microsoft said it would be the exclusive third-party advertising platform for Facebook, which has more than 49 million Internet users. That extends a previous deal into Facebook sites outside the United States. Forrester Research analyst Charlene Li said that Microsoft was a better strategic fit for Facebook, since it knew how to work with software developers and build computing environments -- such as its Windows operating system. "Microsoft is a company that knows how to build platforms, knows how to develop relationships with developers. Microsoft developed the network that is the biggest, most vibrant one out there," she said. "Frankly, Google didn't bring as much to the deal."

View: Full Story on Reuters



There are 24 additional comments
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(1 reply) Quote this comment Reply to this comment #1 Posted by vetSlimy on 24 Oct 2007 - 23:01
Good for Microsoft! lol at first I though MS bought them out
Quote this comment #1.1 Posted by Sagittarius on 24 Oct 2007 - 23:07
Haha, yeah, that's what I thought too at first, and was wondering what kinds of changes MS would be making.
Quote this comment Reply to this comment #2 Posted by +Zhivago on 25 Oct 2007 - 00:00
Quote -
"The only way this works is if Facebook becomes sort of the users' operating system on the Internet -- everyone logs into Facebook every day to get in contact with their friends and use a multitude of future applications that will be developed for it,"


This is exactly where it's going now.
Quote this comment Reply to this comment #3 Posted by LipSmacker on 25 Oct 2007 - 01:54
Zzz Facebook has gotten pretty boring... Too bad life gets in the way
Quote this comment Reply to this comment #4 Posted by Smigit on 25 Oct 2007 - 01:55
240 million is quite a bit to pay for a 1.6% stake in a company. Lets see how it goes for them. There seems to be a trend of over paying for net based sites and services. Ebay said they over payed for Skype and I'm pretty sure Google over spent on you tube.
Quote this comment Reply to this comment #5 Posted by Thrawn on 25 Oct 2007 - 02:11
Complete absurdity.
(3 replies) Quote this comment Reply to this comment #6 Posted by +lylesback2 on 25 Oct 2007 - 03:32
good for facebook, for making millions off this deal, and also for microsoft. At least microsoft won't turn facebook into a crap shoot like google has done with myspace. that site needs a face lift, and a major spam blocker.

facebook FTW
Quote this comment #6.1 Posted by RAID 0 on 25 Oct 2007 - 03:57
I could not agree more.
Quote this comment #6.2 Posted by madmax08 on 25 Oct 2007 - 08:22
Quote - (RAID 0 said @ #6.1)
I could not agree more.

amen to that. if i see another invite to a GLAM party, i'll kick myself in the forehead. its stuff like that that makes me dislike myspace.
Quote this comment #6.3 Posted by kaozgamer12 on 27 Oct 2007 - 04:04
Quote - (lylesback2 said @ #1)
google has done with myspace.
facebook FTW


I thought it was Fox?
(4 replies) Quote this comment Reply to this comment #7 Posted by Cube on 25 Oct 2007 - 03:53
1.6 % ?? WTF I thought they had at least 5% stake with 240mils. Facebook's value is way too inflated IMO.
Quote this comment #7.1 Posted by Smigit on 25 Oct 2007 - 06:33
so are so many of these other companies. Imagine how many developers you could hire for 240 million to produce something from scratch that solves any problems that the old site has.
Quote this comment #7.2 Posted by XerXis on 25 Oct 2007 - 09:22
Quote - (Smigit said @ #7.1)
so are so many of these other companies. Imagine how many developers you could hire for 240 million to produce something from scratch that solves any problems that the old site has.


yes but you wouldn't have the very well known facebook name
Quote this comment #7.3 Posted by Smigit on 25 Oct 2007 - 11:28
Sure, but you'd have more than 1.6% share in the project.
Quote this comment #7.4 Posted by GP007 on 25 Oct 2007 - 12:10
Quote - (Smigit said @ #7.3)
Sure, but you'd have more than 1.6% share in the project.


MS never wanted to buy it, they just wanted to get a deal to sell ads in and outside the US.

IF FAcebooks keeps growing and getting more users. The Ad revenue MS will make off of this deal will be way over $240million. In the end, MS will come out making a profit. And Facebook gets some nice updates/services or w/e.
(1 reply) Quote this comment Reply to this comment #8 Posted by Loxx on 25 Oct 2007 - 07:18
i'm waiting for those 'optimized for Internet Explorer' banners to appear.
Quote this comment #8.1 Posted by Kirkburn on 26 Oct 2007 - 01:30
Quote - (Loxx said @ #
i'm waiting for those 'optimized for Internet Explorer' banners to appear.

Because, obviously, those appear in lots of places on the web?
(2 replies) Quote this comment Reply to this comment #9 Posted by Faisal Islam on 25 Oct 2007 - 07:22
one day 'facebook' will be 'Windows Live Facebook' ryt?
Quote this comment #9.1 Posted by +rm20010 on 25 Oct 2007 - 08:38


That name sounds so corny, yet it's entirely possible. Seriously, MS really sucks when naming most of their services and products.
Quote this comment #9.2 Posted by GP007 on 25 Oct 2007 - 12:12
Quote - (rm20010 said @ #9.1)


That name sounds so corny, yet it's entirely possible. Seriously, MS really sucks when naming most of their services and products.


You don't have to add the "Windows Live" part infront everytime you talk about one of the apps/services. Like Windows live Messanger, everyone just says messanger, or MSN still. Same for other things, the whole idea is that these apps/services are part of the Windows Live family.
Quote this comment Reply to this comment #10 Posted by Samboini on 25 Oct 2007 - 08:32
Pretty steep IMO.
Quote this comment Reply to this comment #11 Posted by PENGUINwithM4A1 on 25 Oct 2007 - 09:39
damn, wish id thought of that >_>
Quote this comment Reply to this comment #12 Posted by Mikeyx11 on 25 Oct 2007 - 16:08
Quote -
Microsoft Corp., a company which needs no introduction


If it needs no introduction, then why mention that it doesn't need one?
Quote this comment Reply to this comment #13 Posted by Magallanes on 25 Oct 2007 - 17:12
1.6% it's not enough to "buy" a sit in the committee room.

I think that we are too near of a new dotcom crisis, for example 1 share of google give some sort of $10 but a share cost $600, so investing $600 just give $10 x year, a 1.6% annual or you could say, putting your money under the pillow.



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