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Thursday, 25 October 2007 |
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Microsoft gets down and funky with increased Facebook investment and an advertising deal designed to snub Yahoo! and Google.
‘Social networking' is an odd concept, yet Microsoft bought into it again yesterday, albeit timidly by the standards set by the Beast of Redmond. This follows on from a US-only agreement that started in August 2006.
The Beast’s move values Facebook at US$15bn. Sorry, I should have said that this move values loss-making Facebook at US$15bn.
“We are pleased to take our Microsoft partnership to the next level,” said Owen Van Natta, Chief Revenue Officer, Facebook. “We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to nearly 50 million active users of Facebook.”
“Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only for our two companies, but also our collective users and advertisers,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership.”
Like last year’s US$580mn News Corp acquisition of MySpace (click here), this latest deal forces one to ask whether old codgers (sorry Rupert, sorry Bill) know what they are talking about and flashing the cash for. MySpace is already considered naff and passé and Facebook is hurtling down the same drain just now. Courtesy of the Beast, it looks like US$240mn is headed the same way.
Jim Chalmers
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