October 24, 2007
Microsoft Wins Facebook Contract with a $240 Million Investment Beating Out Google
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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Comments on Microsoft Wins Facebook Contract with a $240 Million Investment Beating Out Google »
Lars Behrenroth @ 6:31 pm
I’m curious how the value of these communities is determined. Does every member count for a certain amount?
Mark Laymon @ 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.
Gotan Raider @ 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.