The battle to fund Facebook's warchest

The universe might be expanding but the tech universe is shrinking. Just as Oracle and SAP are dividing up what's left of value in enterprise software, Google and Microsoft are in competition to dominate the advertising and social networking spaces, with Yahoo trailing behind. The path to domination, or at least good fortune, is Facebook, which is looking to fund a warchest to handle the fast-paced growth the company (more than doubling staff in a year, data center build out and international expansion) and some acquisitions.

MySpace still leads the social networking category (Google sells ads on MySpace) but isn't viewed as having the same potential and market value as Facebook over time.

Microsoft is selling banners on Facebook, but that may not be enough to convince Facebook to let Bill Gates and company buy Facebook futures, on a valuation north of $10 billion for a company with $150 million in revenue. Google is reportedly vying for the same chunk of Facebook. It's a repeat of the DoubleClick affair, which Google won.

Facebook CEO Mark Zuckerberg has been clear about his intention to stay independent, so it will be interesting to see what buying a chunk of Facebook would give Microsoft or Google, especially since Facebook is expected to have its own advertising platform soon. It seems that Microsoft or Google would really rather acquire Facebook, just as Fox did MySpace, and let Zuckerberg run the company as an independent unit.

The Wall Street Journal is reporting that Facebook will make its selection soon, and the winner will win the right to sell ads for the the company outside the U.S. in addition to a minority stake in the company.