Facebook gets Micro-investment
October 25th, 2007 by Lloyd Gofton
Microsoft has paid $240m (£117m) for a 1.6% stake in Facebook. This may seem like a mighty price for such a small stake, but it is important for two reasons.
1. Microsoft has beaten Google to the punch, securing a stake in the fastest growing social network in the world, as confirmed by ComScore’s figures below:
![[Faceoff]](http://online.wsj.com/public/resources/images/MK-AM501_FACEBO_20071024212544.gif)
2. Microsoft, which already provides banner advertising on Facebook US, has now secured long term international advertising access to one of the largest (50 million active users) social networks, becoming the exclusive third-party advertising platform partner for Facebook.
It is important to remember that as social networks become increasingly popular, many people are using their accounts as their door way to the web. Microsoft recognises that if its advertisers have access to these user’s through their web gateway - then the opportunities to sell are enormous. Furthermore, thanks to the user information provided through Facebook profiles, advertising can be targeted more precisely than most other online advertising channels.
Google knows this better than most and its charge to monopolise the online ad sector has taken a significant hit with this announcement. Although I don’t think they will be unduly concerned due to their considerable headstart in the sector.
This deal also answers one of the hottest valuation questions on the web today. How much is Facebook worth? The answer: $15 billion or £7.3bn…currently. This is why Facebook turned down Yahoo!’s $1 billion bid last year.
Not bad for a social networking site that started in a university dorm room less than four years ago, and hasn’t broken even yet.
The BBC has the full story.
Technorati tags: microsoft, facebook, google, online+advertising
Tags: facebook, google, microsoft, online advertising
