Microsoft Wins Facebook Contract with a $240 Million Investment Beating Out Google
Posted on | October 24, 2007 | 4 Comments
Facebook is now valued at $15 billion
According to the Wall Street Journal article, Microsoft has now "Inked a Deal with Facebook!"
"We are pleased to take our Microsoft partnership to the next level," said Owen Van Natta, Facebook’s chief revenue officer, in a press release.
Microsoft agreed to invest $240 million for a 1.6% stake in Facebook Inc. that values the social-networking site at $15 billion.
The deal signed today is an expansion of that agreement and focuses on international versions of the Facebook service, which Facebook is now starting to open. A deal with Microsoft would allow Facebook to shift some of the burden of selling international display ads to its larger partner. Microsoft in recent years has built up a large online advertising sales force and has invested in technologies to broker advertising over the Web.
By the end of this year, Asia will account for 35% of the world’s social networking users, with 28% of users in Europe, the Middle East and Africa, 25% in North America, and 12% in the Caribbean and Latin America, according to research firm Datamonitor Plc.
I am surprised that the amount is so low and that the percentage was only a 1.6% stake.
Will this close out other bids for a larger share hold from Google?
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4 Responses to “Microsoft Wins Facebook Contract with a $240 Million Investment Beating Out Google”
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October 24th, 2007 @ 6:31 pm
I’m curious how the value of these communities is determined. Does every member count for a certain amount?
October 24th, 2007 @ 7:18 pm
@ Lars,
Every member is considered a value.
Since these companies are data hounds they look into each and every way they can monetize users.
A project I am working on is largely funded from page views. If I have 1000 page views in a day I make $40 from just one vendor, if I have 40,000 page views I make $400 from them.
I am sure the Microsoft, Google, Yahoo, Facebook and all of the others out there are much better than I am at converting the millions of pages views, $15 Billion is achievable.
October 24th, 2007 @ 9:13 pm
Usually these valuations have very high Price Earning values, which in plain english means it will take many years of current revenue to get the capital investment back.
March 21st, 2009 @ 1:35 pm
There is no doubt that MS will always aim for obtaining monopoly by any means necessary. But what I feel is Google is going to do the same thing; but in a fair way.