Microsoft Planning On Investing In Facebook

September 24th, 2007 at 12:00 am


The Wallstreet Journal reports: "Microsoft Corp. is in talks with Facebook Inc. about making an investment in the social-networking startup that could value Facebook at $10 billion or more, according to people familiar with the matter."

This piece of news gets more interesting and unveils some squabbling with another tech titan, Google. "The talks set up another likely face-off between tech titans: Google Inc. has also expressed strong interest in a possible Facebook investment, said people familiar with the matter.

Microsoft’s approach to Facebook in recent weeks with proposals to invest in the fast-growing site is part of the software giant’s effort to catch up with the Internet rival Google. If successful, Microsoft’s talks with Facebook could give it an up-to-5% stake in the closely-held startup — a stake potentially valued at roughly $300 million to $500 million, the people familiar with those talks said."

Well this is interesting and so far that’s the background of this whole issue . The rest of the details are in that article but here we are more interested of what the blogs think.

Here’s Om Malik’s take on the case, "If the Z-meister takes the cash, then in a sense he is getting a put option from Microsoft, which prevents Facebook from embracing anyone else. Like Google (GOOG). It also ensures that Microsoft’s advertising business doesn’t go elsewhere…ever! The Journal says that fresh cash is needed to buy others and pay for the infrastructure that is needed to support a fast-growing infrastructure." (GigaOm)

My opinion also plays in the same field and I have one clarification, with a 5% stake, will Microsoft be that powerful to control who Facebook does business with?  I would like to see however, a company with lots and lots of conflicts of interests.  That would be a pretty sight and a field day for the press.