Microsoft seems to have won the Facebook deal

Microsoft seems to have won the Facebook deal

Summary: Word on the street has it that Microsoft stole the Facebook deal from Google with a $240 million investment for 1.6% of the company.

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Word on the street has it that Microsoft stole the Facebook deal from Google with a $240 million investment for 1.6% of the company. If Microsoft's investment is indicative of what Facebook is worth, its valuation is somewhere in the ballpark of $15 billion. It's a bit strange seeing Microsoft actually prevail in a bidding war against Google. Perhaps Google didn't want the overpriced company bad enough -- $15 billion is an interesting valuation considering it would put each user profile on Facebook at around the $314 mark.

$240 million really isn't that much. Especially when $750 million was the going figure for the longest time. In terms of Google's cash flow, a company accountant could trip coming out of the bathroom and drop that much cash. It's safe to say that Microsoft was the highest bidder because it wanted this particular investment more. That's not to say that Google turned its nose up at Facebook entirely. The interest was there -- just not at Facebook's asking price. -- Wired Blogs

This "small" investment guarantees Microsoft's position as the sole advertising provider for Facebook in the United States and internationally.

Topics: Banking, Google, Microsoft, Social Enterprise

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5 comments
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  • What MS did is enable Facebook to stay an independent company, and,

    of course MS way over paid to make sure Facebook is flush in cash. And, finally, the poison pill that MS is the exclusive advertiser.

    Basically, MS, more than anything, wanted to keep Facebook out of Google's hands.

    And, of course, it would be a disaster for MS to try to buy Facebook. It would be a huge culture clash, including with the founders, and it would be a long embarrassing story trying to switch the servers from Linux to Windows.
    DonnieBoy
  • It's their money........

    If Microsoft wishes to through their money away in a garbage pit, that's their business. It's a bigger waste since those funds should have been used to improve the shoddy products that they are putting out.
    linux for me
  • RE: Microsoft seems to have won the Facebook deal

    There goes the Facebook neighborhood.
    Too bad to, it was pretty nice.
    starcannon@...
  • RE: Microsoft seems to have won the Facebook deal

    Yea, Google (1) has their own very popular social network in Europe http://www.businessweek.com/technology/content/oct2007/tc2007107_530965.htm and (2) has been overspending on engineers lately http://money.cnn.com/2007/07/20/magazines/business2/google_earnings.biz2/index.htm

    I don't think Google really wanted to play, they just wanted to stoke the bid.

    My 2 cents.
    jmanico
  • smart move... even for the price

    Google should have kept Microsoft out of Facebook at all costs, but now they have
    allowed Microsoft to get into the online game. Google couold have ruled the Internet,
    more than they already do if they could get facebook. Facebook will be a very very
    integral part of the future Internet operating softwares imo. Google mised out on the
    deal, a bit of extra money now is nothing for the steady value of the advertisements
    microsoft now has acces too. Good move for Microsoft.
    varoon5