Microsoft and Facebook: The $240 million poke

It's official. Facebook decided to ignore the friend request from Google and instead clicked "OK" to one from Microsoft.

The deal, reported first in this spot earlier Wednesday, gives Microsoft a much-needed win against its Silicon Valley search rival. As noted over at Caroline McCarthy's blog, The Social, Microsoft is paying $240 million for a stake in Facebook, in a deal that values the social networking company at $15 billion. That's at the high end of what had been rumored.

Under the deal, Microsoft will also get an expanded role in Facebook's ad sales, becoming "the exclusive third-party advertising platform partner for Facebook," and also beginning to sell ads internationally. The two companies' prior deal covered only banner ads and only in the U.S.

So how important is the deal for Microsoft? Piper Jaffray analyst Gene Munster put it this way earlier Wednesday. "They've been beaten by Google since the beginning of time," Munster said. "They may want to make a statement that they aren't going to sit on the sidelines."

Well, it's definitely a statement. Let's see what Wall Street and the industry make of that statement. A conference call with analysts is due to start shortly.

[coryschulz]

Oh this sucks....

I was hoping this wouldn't happen. MS is going to ruin Facebook. Why couldn't Google just throw some money at Facebook and buy them out? It's in their best interest. They should give up on MySpace and focus more on Facebook. MySpace is crap compared to Facebook. Facebook has way more potential, and they've already made agreements with companies like Apple to sell songs from iTunes on Facebook. Google and Apple and Facebook just all go together very well, and Microsoft just doesn't fit into the overall philosophy and mission statement of the other companies. MS is like a rotting spot on an otherwise perfectly good piece of fruit. It's sad really... the people what will be hurt the most are those of use who actually value Facebook and use it regularly. Atleast it's only a 1.6% stake. Nothing to really worry about... MS just bothers me.

[walkaboutkiwi]

I would have to agree

I can't believe that MS have also won this deal! FaceBook what are
you doing? Let's just hope that MS don't have a say on the
development platform; PHP is far superior than ASP.net; I mean just
compare MySpace and FaceBook together.
Like you clearly stated, Google, Apple and FaceBook go very well
together.

[The_happy_switcher]

Facebook

MSFT doing what it does best: Overpay for worthless companies.

[SuperHatz]

Come on - get over it already!

Services on the net are digital - on one minute(remembered), off the next(forgotten).

With fires and floods, who really cares if people get to log onto Facebook and view Microsoft network ads? Do a coal miner(us all) a favor. Conserve energy, turn it off.

OR...

Simply move on to the next best thing. Something always comes along. Witness MS squander their cash at will - with no consequences.

Let's all suffer oppression due to new taxations grasping to save our failing economy. We can suffer the consequences of searching for freedom using the Internet, while MS has the fun.


There's a whole lot more 1's and 0's coming to a computer near you - unless a energy crisis causes brownouts to conserve. Guess you better have a good laptop with games to play - because the Information Super Highway will not exist and Facebook will not save the day.

Good luck! from Nashville