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Microsoft to Pay $240 Million for Stake in Facebook 277

Nrbelex writes to mention The New York Times is reporting that Microsoft has beat out Google and Yahoo for a 1.6% stake in Facebook. The investment will cost Microsoft $240 million valuing the total site at somewhere around $15 billion. "The astronomical valuation for Facebook is primarily evidence that Microsoft executives believed they could not afford to lose out on the Facebook deal. Google appears to be building a dominant position in the race to serve advertisements online. Fearing it might lose control over the next generation of computer users, Microsoft has been attempting to match and in some cases block Google's plans, even if that effort is costly."
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Microsoft to Pay $240 Million for Stake in Facebook

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  • Simple API (Score:5, Interesting)

    by SIGALRM ( 784769 ) on Wednesday October 24, 2007 @05:50PM (#21105767) Journal
    From TFA:

    The high valuation also represents a belief that Facebook is creating an important new operating system -- one that exists on the Web instead of on personal computers.
    I'm not sure how a valuation is capable of representing a belief, but it does reflect an acknowlegement of important trends. Facebook's platform [] is similar to other "Web 2.0" RESTful APIs but is pretty simplistic (i.e. CanvasPages--which is basically an IFRAME, alerts, feeds, and privacy settings, etc.). Don't expect a RoR framework or anything close to Google's API.
  • by IgLou ( 732042 ) on Wednesday October 24, 2007 @06:19PM (#21106119)
    I'll admit up front I'm not one of these technology pundits that make endless speculation but something occurs to me. In the big picture doesn't the future of social networking truly depend on the interopability of these social networks? And if so, wouldn't the player that steps up and comes up with a method to bring interop between social networks and then effectively control that method (heck they don't even have to make it proprietary just control the protocol) will be the one you want a stake in if you're yahoo/google/ms?

    I'm on Facebook, I enjoy it but it's clear to me it's not worth $15 billion. As others have said the "next big thing" will come along and draw people away again. I can already see how facebook is going the way of MySpace, sadly with the number of applications that people clutter their profile with (myself included!). Then when everyone rushes off facebook then what's facebook worth? Hardly 15 Billion but the market seems to responded positively to this announcement and Microsofts stock price has done well today (because they beat google).

    My point is that I believe the real stake will be the provider that brings people the ability to use the service that they want and still make their connections. Otherwise people are blowing their money on things that have no real value due to user flux.
  • by MrAnnoyanceToYou ( 654053 ) <dylan@dyl a n b r> on Wednesday October 24, 2007 @06:50PM (#21106431) Homepage Journal
    The Internet is the biggest Social Networking site on the planet, and all these subcategories of it are going to be less and less important as larger percentages of the populace can build their own little inter-communicative sites.
  • Re:MyFaceYouBook (Score:3, Interesting)

    by insertwackynamehere ( 891357 ) on Wednesday October 24, 2007 @06:56PM (#21106505) Journal
    MySpace and Facebook have always attracted different crowds. At this point many people have both, but there is one that is what they use all the time and one that is pretty much dead. But there isn't evidence that MySpace is dying, it's just that Facebook has taken the spotlight as being the next big thing. People aren't still talking about Google's search engine capabilities like its 1998 but Google as a search engine is doing just fine, and possibly even gaining users still. Google the company is also excelling and whenever something new comes out from Google, it gets press. Right now stuff is coming out about Facebook and they're getting press. Myspace is no doubt going to get some kind of press with the next 2 months at the MOST. But none of these sites are dying, press time or not. There is a Web 2.0 bubble, but it is spurred by sites like, Facebook, and Myspace. The first web bubble was fueled by Google, Yahoo, Amazon etc. So when you say the bubble will burst and these sites will be worthless, you are misunderstanding history; the large, popular websites survive the bubble and become staples of the web and the 100s of pointless tag-along sites that try to jump on the wagon at the last minute, have no users and get tons of stupid investors are the ones that go under.

    In short, the Web 2.0 bubble will burst and just like the Web 1.0 bubble, all of the tag-along crap will be purged and the big-players will survive for an indefinite amount of time. I don't see companies like Amazon, Ebay and Google going under any time soon (and I mean I can see them lasting for decades, even into the 2100s, at least as companies, much like Sears and other stores have been around since the 1800s). All the big players now, that inspire the addons have just as much potential and when the bubble bursts, their survival will only cement their longterm existance as they continue to evolve and stay in business for years.
  • by ackthpt ( 218170 ) * on Wednesday October 24, 2007 @06:58PM (#21106523) Homepage Journal

    The Internet is the biggest Social Networking site on the planet, and all these subcategories of it are going to be less and less important as larger percentages of the populace can build their own little inter-communicative sites.

    Perhaps the real money is in creating a site which allows people to tie all their memberships together across these social networking sites. Should that happen, I predict lawsuits -- they don't want you to go anywhere else and they'll do anything to stop you within their power. But it would be a neat idea.

  • by insertwackynamehere ( 891357 ) on Wednesday October 24, 2007 @07:09PM (#21106643) Journal
    Your problem is in step 1. 1999 called, they want their business model back. You see, Facebook is worth 15 billion because investors acknowledge that it is. Money _isn't_ real anymore. Everything is based on faith and trust in the handlers of the money, whether it be the bank, the government or the company. There is no backing of silver or gold to money any more, only trust, and Microsoft, a big player, trusts that Facebook is worth 15 billion and that's all that matters. A pointless company that can't back up it's existance is not worth 15 billion to Microsoft. So yeah, your idea might work until the second web bubble bursts and the tons of sites following your plan already will experience the pitfall of ebusiness when there is actually no business after all.
  • by clubhi ( 1086577 ) on Wednesday October 24, 2007 @08:02PM (#21107275)
    most ads are pulled from outside sites. this won't be the case for very long. I wasn't saying facebook uses the technique of local ads. I was saying that if they needed to they could. Once advertisers catch on. There are a LOT of venture capital startups right now investing in software that tracks what a real click is and are people really seeing the ads and such... A couple more years and it will be much more difficult to have a program like adblock.
  • by riceboy50 ( 631755 ) on Wednesday October 24, 2007 @08:03PM (#21107293)

    Nobody used MySpace.
    I don't know where you get your information, but MySpace has a huge user base. As of September 7, 2007, there are over 200 million accounts [].
  • by Breakfast Pants ( 323698 ) on Wednesday October 24, 2007 @08:51PM (#21107791) Journal
    I remember you; you said the same damn thing when MySpace was bought for 1 billion. Did you know that shortly after they were bought they made a 1 billion dollar advertising deal?
  • by Jaruzel ( 804522 ) on Thursday October 25, 2007 @04:55AM (#21110679) Homepage Journal
    Who else owns a stake in facebook (other than the founders) ?

    Personally, I can't see the founders telling MS to f%&k off when they turn up at a board meeting suggesting that Facebook be renamed to - $240m can wield an awful lot of unoffical power...


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