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Microsoft Invests In Facebook At 11-Digit Valuation
Written By Mike on Oct. 25, 2007.
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All those rumors were true and Microsoft is now purchasing a 1.6% stake in Facebook for $240 million. This makes sense for Microsoft because they already gave Facebook many millions for the right to run ads on Facebook.com so they're essentially protecting their investment.
$15 billion valuation!
Is Facebook really worth this much? The NYT reports that they will bring in $150 million in revenue this year, but that's revenue, not profit, and the multiplier on the valuation is just astronomical. You gotta wonder if Tom from Myspace is pissed about selling for ~$500 million back a few years ago. He better not be pissed because at the time, people thought that number was insane, and now a Facebook valuation has come down at 24x what Fox paid for Myspace. Tastes like a bubble of snot.
Ozone42
Written Oct. 25, 2007 / Report /
It boggles my mind what some people will spend money on.
cavemonkey50
Written Oct. 25, 2007 / Report /
I guess this is the first of Microsoft's many upcoming Web 2.0 investments. It will be interesting seeing where they invest and how that turns out for them.
Eyenovation
Written Oct. 25, 2007 / Report /
Value is always going to be figured by what someone will pay for something. I'm sure Tom isn't griping about all his money in the bank. Once you get to be that rich, it's all just a bunch of zeros. (or so I'd think).
Nils
Written Oct. 25, 2007 / Report /
What I see on my account is a bunch of zeros sometimes.
It's funny, but just when I keep reading more and more criticism of FB (the gadgetry, the growing clutter, the fact that social is worthless if you can't interact with the outside world, ...) I now see MS investing in it.
Only yesterday, in a totally unrelated situation but in regards to MS, I just couldn't help think: "Can't these guys ever do anything right?"
Also, to me, this is just nuts and I don't think anyone could ever pay that 150 and "come out clean the other side". Personally, I've already given up on FB.
Nonetheless, extremely interesting indeed, be it in a slightly morbid way.
Michael
Written Oct. 25, 2007 / Report /
This reminds me a lot of when Google made that 1% investment in AOL. Everyone thought that it was a bad idea but look at AOL now. Successful and using Google Search.
Perhaps Microsoft is trying to wrestle away control from Mark and divert Facebook on a path to profitability and less of what Mark thinks is cool.
Josh
Written Oct. 25, 2007 / Report /
Ozone42 said:
And in other news, 25,000 people will die today (just like every day) from starvation.
Wonderful world we live in, innit'?
Quick, someone suppress my cynicism before it gets out of control!
posure
Written Oct. 25, 2007 / Report /
You've got to take into consideration with this number that Microsoft also becomes the exclusive advertising partner on Facebook...so I wouldn't put it as high as $15 billion. No matter how you look at it though, its a pretty large investment for such a small stake, but $240 million is a pretty negligible amount for Microsoft. Besides, that 1.6% could turn out to be worth a lot in the long run if Facebook stays independent and goes public.
xirclebox
Written Oct. 25, 2007 / Report /
makes me wonder if they will use FB to introduce Silverlight to the masses.