Thursday, October 25, 2007

Microsofts 1.6% stake pushes Facebook value to 15 Billion

As we thought earlier, Microsoft did buy a piece of Facebook, 1.6 % for 240 Million, not 5% for 500 Million.

Microsoft won its latest sparring match with Google on Wednesday, securing a deal to buy 1.6 percent of the social networking site Facebook for $240 million - a move that values the young site at $15 billion and bolsters a new model of online advertising.

The highly anticipated partnership in the trendy virtual world of social networking suggests that:

-- Microsoft has emerged as a rival of Google, which reportedly also had been wooing Facebook and already has a $900 million advertising deal with MySpace, Facebook's biggest competitor.

-- Facebook CEO Mark Zuckerberg looks prescient for refusing to sell the Palo Alto startup to Yahoo for an estimated $1 billion last year. Wednesday's deal sets the worth of the 23-year-old, who owns a 20 percent share, at an estimated $3 billion.

-- More than ever, News Corp.'s $580 million purchase of MySpace two years ago looks like a steal.

-- The online advertising market is heating up, particularly on social networks.


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