Microsoft Takes a Stake in Facebook

Posted By: Bob Buskirk on October 27th, 2007
6 Comments... What do you have to say?

This week Microsoft bought a 1.6 percent stake in Facebook for a whopping $240 million! That puts the value of Facebook at $15 billion! Now that is a lot of money for a company that does not even have 200 million in annual revenue. Myspace was bought back in 2005 for $580 million. Since that time speculations of how much it is worth range anywhere from $10-20 billion. So I would say the $15 billion is right around what Facebook should be valued at. Good thing Facebook did not take Yahoo’s 1 billion dollar offer last year.

So what does this $240 million get Microsoft? Well now they own 1.6 percent of the company (big deal). The bigger thing here is that Microsoft will be the exclusive provider of banner advertising and sponsored links on Facebook, of course using Microsoft’s adCenter platform. This is huge for Microsoft as their adCenter is a slow third behind Google’s Adsense and Yahoo’s Publisher Network. They are also sticking one to Google who won the bidding battles on YouTube and DoubleClick Inc. I think in Google’s mind it would have been nice to have the exclusive deal with Facebook, but unlike Microsoft it was not necessary.

Facebook is another great story of a kid who started the site from his dorm room in school. Mark Zuckerberg started the site while at Harvard and in less than 4 years it is valued at $15 billion! Myspace is the only social network larger than Facebook, but a lot more people are heading the way of Facebook. I know I am, I am tired of all the crap on Myspace, and I really like the clean look of Facebook. In my opinion it is a much better social networking platform. So when are we going to see Facebook stock? Make sure you get it early, look at the Google stock!

Posted in: The Net
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6 Responses to “Microsoft Takes a Stake in Facebook”

Greg said on October 27th, 2007 at 10:26 am

I’ll be sure to buy plenty of stock if they do come out with it.

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Leo said on October 27th, 2007 at 10:00 pm

Judging by the success, I probably won’t be able to afford any stocks.

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Mulamaker said on October 27th, 2007 at 10:16 pm

Like Leo said,

If Facebook does go IPO, I might able to afford only 1 share. Mark said from Techcrunch interview that he doesn’t see the company going public.

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Sean said on October 28th, 2007 at 1:34 am

If it goes IPO, stock is going to be really high in price. Probably too high for most of us to own much of.

That said, I don’t think facebook’s would-be stock will raise by much in the future. But, look at the iPod. $399 worth of stock in 2001 translates to $10,0000 today.

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Moms Cash Blog said on October 28th, 2007 at 12:43 pm

Right on BoB, I am very glad you posted this topic…because Sean’s comment above is intersting to look at. $399 to $10,000 that is a lot of money. I am just getting into stocks myself and see a lot of room to make money even if you don’t have a lot. You can track my success on my blog. It started on Friday. Thanks again for the great & exciting $$$ info on Facebook ; ) and the idea of their someday stock option…I agree with you about Myspace too, there is too much junk on there now!

~Krysti~

http://www.momsCashBlog.com

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Neil Duckett said on October 30th, 2007 at 7:36 am

Some serious coin for such a small % …. would love to be in Marks shoes now, still don`t know what`s up with trying to trim 5 yrs off your age though.

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