Microsoft Invests in Facebook

October 25th, 2007 at 12:00 am


It’s official.  Microsoft has bought a stake in Facebook.  The 1.6% share in Facebook’s $15-billion valuation cost Microsoft $240-million dollars finally beating Google in the battle.

Microsoft and Google were both planning to buyout or buy some stock of Facebook and this Wednesday, Microsoft finally got its stake in the popular social network.  Google apparently backed down saying that Facebook was not essential in their business plan.

These are probably signs of a bubble waiting to burst but unlike the first bubble, this one is taking way longer and possibly it may not burst at all.  The huge amounts of money being exchanged are signss of the huge and obvious monetary value of social networks.  Recall that News Corp bought out MySpace for $580-Million.  On that note, Myspace was a therefore a bargain and Facebook is a scam since Facebook doesn’t even make more than $200 million in revenue.

Anyway it isn’t as simple as the figures show, of course there are upsides to the purchase of stake and the valuations.  Facebook is a social network and a very popular and influential one.  Its founder Mark Zuckerberg plans to make it a prime real estate for ads much like Google.  Many also consider his move not to sell Facebook for $1-billion dollars last year.

Now, with Microsoft’s backing, Facebook is  now more than prepared to expand and according to Zuckerberg, go public in about 2 years time.