Microsoft reportedly eyeing Facebook stake

Microsoft is eyeing an investment in Facebook that would value the social networking company at about $10 billion.The investment, which was reported by The Wall Street Journal citing "people familiar with the matter, connects a few dots on the social networking landscape.

Microsoft is eyeing an investment in Facebook that would value the social networking company at about $10 billion.

The investment, which was reported by The Wall Street Journal citing "people familiar with the matter, connects a few dots on the social networking landscape. Over the weekend, TechCrunch reported that Google was planning to make a big move into social networking. The likely target: Squashing Facebook.

Meanwhile, Yahoo apparently isn't in the "buy Facebook now" camp since it recently launched Mash. The message here from the two search giants appears to be: Build don't overpay.

Enter Microsoft. Facebook is already using Microsoft's ad platform and could use a big brother with Google coming down the pike. Put it this way: You are Facebook's brain trust. You see Google coming. Wouldn't you want to get cozy with a well-heeled partner? And if that idea isn't so hot Facebook could use Microsoft to boost its valuation.

According to the Journal, Microsoft would buy a 5 percent stake valued at about $300 million to $500 million.

What's notable here is that Google is also reportedly interested in a Facebook investment. Google's interest, however, may just be to upend Facebook's ad deal with Microsoft.

But these bidding wars are certainly sounding familiar. Google and Microsoft were both looking hard at DoubleClick. In the end, DoubleClick got a better deal due to Microsoft's interest.

In Facebook's case the motives of all parties are clear. Microsoft wants to invest in Facebook to expand its ad deal abroad--and lock in the U.S. pact with Facebook beyond 2011. Google wants some Facebook business and loves to annoy Microsoft. Facebook is guaranteed to get a lofty valuation and a big partner to cover its flank.

Will Microsoft be bridesmaid to Google again?

Another possibility: Given the number of Microsofties on Facebook this investment may just be a case of trying to recoup some lost corporate productivity.

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