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Did Facebook break Google's heart when it chose Microsoft?

DailyTech yesterday covered news that Microsoft and Facebook had entered into an exclusive relationship, after Microsoft beat out Google in courting Facebook.

Now Google is sharing its feelings, though it is trying not to talk too much about Facebook, which seems to be a sensitive subject.

Google spoke to reporters on Wednesday, but the event was overshadowed by Google's defeat at the hands of Microsoft in wooing Facebook.  The company indicated that Microsoft overbid in wooing Facebook, and feels its own relationship with is much stronger.  Microsoft's $240 million investment gives the company a 1.6% share -- a 51% stake in Facebook would cost just over $7 billion. 

Google CEO Sergei Brin waxed, "We have a great relationship with MySpace.  We probably partner with on the order of 20 different social networks."

He added, "We don't feel, at a higher level, that we need to own every successful company on the Internet.  We can partner with these companies."

However, Google was unable to partner up with Facebook, likely due to the fact that it forked over $900 million to secure an exclusive advertising deal with competitor MySpace last Summer.

Perhaps Google is already deep enough in the social network scene.  It has its own social network even, Orkut, which is very popular, though chiefly in Brazil and India.

Google is looking to increase advertising in its high profile customers.  It gives the example of one of its top accounts, which only advertises 1 percent of its products via Google.  That leaves 99 percent left to grow into, Google advertising sales president for North America, Tim Armstrong, says.

He says Google's point-and-click offerings are gaining increasing success with corporate brands.  He states, "We are getting real traction for multiple reasons.  Brand and search [advertising] are moving closer together."

The company could not be clearer about where it sees Facebook in the long run.  Jonathan Rosenberg, Google's senior vice president of product management, explained, "At Google, we constantly feed the winners and starve the losers."

Despite losing the hand of Facebook it still looks like Google is a winner, for the most part, with an aggressive business plan which has pushed out many new services and will continue to do so.  With such plans and products as Google News, the Unity Project trans-pacific cable line, and possibly even a new GPhone, Google should see continued success.

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$15 Billion???
By yost007 on 10/26/2007 12:45:50 PM , Rating: 4
How in the world is facebook worth $15,000,000,000?

I read somewhere that they value each user at $500. I am registered. Never used it though. Can I have my $500 back now.

RE: $15 Billion???
By Sunrise089 on 10/26/2007 1:51:43 PM , Rating: 3
They simply aren't.

That figure comes from taking the price of MS's partial ownership and expanding it to the entire 100%. But that's a deeply flawed analysis. Even if a willing buyer was out there, no one in their right mind would pay any more than twice what MS did for any part of Facebook, since MS's small take bought them the only thing that matters - COMPLETE CONTROL OF ADVERTISING.

The current figures being used would be analogous to someone buying a piece NBC television for X dollars, and that price giving them full control of what commercials are played and a 50% take from those commercials. 2X would be the true value of the company (assuming no other revenue streams) unless you really place a high value on getting to decide which Heros character is going to die this week.

RE: $15 Billion???
By BladeVenom on 10/26/2007 3:26:58 PM , Rating: 2
If each member is worth that much to them, give me half of that and I'll join.

RE: $15 Billion???
By MonkeyPaw on 10/26/2007 3:53:30 PM , Rating: 2
My guess is that sites like facebook have value because they nicely catalog audiences for marketing purposes--most everyone lists what they like, what their hobbies are, and then pick music, movies, books and more to talk about. I'm sure that demographic info is worth a considerable amount of money. There's a lot that can be extracted without divulging personal info or email addresses, too. Then there's the ad space...

RE: $15 Billion???
By erikejw on 10/26/2007 4:58:52 PM , Rating: 2
They own the copyright of everything that is put on the site.
Even pics or anything any user put there.

A future employee can buy your info etc etc.
Think about the power that will hold in 20-30 years time when and emplyer can know everything you ever put up there.

This is just an example of how they can use your info.
They get all rights to anything, it what you agree on when you start use it.

RE: $15 Billion???
By toongeorges on 10/26/2007 6:55:53 PM , Rating: 2
They own the copyright of everything that is put on the site.
Even pics or anything any user put there.

Wrong! The copyright of a "work of art" goes automatically to the creator upon creation. If Facebook would be using your texts/photos in a way you do not agree with you can actually sue them.

They may indeed use your personal data to look for patterns in your behaviour/interests and use this for/against you. If you read the privacy policy from Facebook at it appears they are not after protecting your privacy and are rather out to exploit the information about you. Some quotes:

When you enter Facebook, we collect your browser type and IP address. This information is gathered for all Facebook visitors. In addition, we store certain information from your browser using "cookies."

...we cannot and do not guarantee that User Content you post on the Site will not be viewed by unauthorized persons. We are not responsible for circumvention of any privacy settings or security measures contained on the Site. You understand and acknowledge that, even after removal, copies of User Content may remain viewable

Facebook may also collect information about you from other sources, such as newspapers, blogs, instant messaging services, and other users of the Facebook service through the operation of the service (e.g., photo tags)

Facebook may use information in your profile without identifying you as an individual to third parties.

We may use information about you that we collect from other sources, including but not limited to newspapers and Internet sources such as blogs, instant messaging services, Facebook Platform developers and other users of Facebook, to supplement your profile.

and the following quote: I never signed up for Facebook, though several friends invited me, thus (!):

If you choose to use our invitation service to tell a friend about our site, we will ask you for information needed to send the invitation, such as your friend's email address... Facebook stores this information to send this one-time invitation, to register a friend connection if your invitation is accepted, and to track the success of our referral program.

This is where the "value" of facebook is: they can sell your identity to marketeers.

Personally I never believed in the community hype as it unfolded, because I have been in charge of a big student network and real communities need something else than a portal that acts as a broker between a community and its members.

Real communities need to control their infrastructure and data themselves, so they can make money on their identity themselves instead of one or another community website. Also communities need websites customised to their needs, they do not need a generic portal with generic functionality.

Community websites are still young and their nature will change drastically. The business plan that predominates at this moment makes no sense. It makes no sense for Facebook to expect flourishing communities to join and surrender all their advertisement opportunities to Facebook.

The real way is not to take from communities, but to support them. The real way is to write the software communities need and to sell it to them and let them control themselves. If no one else sees the flaw in the current way of doing business and does something about it, I will, give me a couple of years. Feel free to contact me at if you would want to send me a reaction. Anyway, I tell you, in 10 years from now, we'll all wonder how we could ever have thought that Facebook would become something big. You may disagree. Time will tell who is right.

Does it matter?
By Kefner on 10/26/2007 11:24:36 AM , Rating: 1
Does it matter, in the long run, Brondo will own everything! Oh, and it has electrolytes!

RE: Does it matter?
By aberdeen5 on 10/26/2007 11:55:07 AM , Rating: 3
brought to you by carl's jr

RE: Does it matter?
By geddarkstorm on 10/26/2007 12:04:25 PM , Rating: 2
Sweet deal! Bring on those electrolytes!

RE: Does it matter?
By Screwballl on 10/26/2007 1:54:41 PM , Rating: 2
Would you like another BIG ASS FRIES with your order?

Bitter Beer Face?
By Scorpion on 10/26/2007 12:33:56 PM , Rating: 2
Rosenberg, Google's senior vice president of product management, explained, "At Google, we constantly feed the winners and starve the losers."

Sounds like someone just swallowed a mouthful of bitter beer!

Seriously, quotes like this make me afraid. I like Google for what they've brought to online email, searching, mapping, etc. But they act like an imperialistic corporation, hell bent on owning every facet of the internet, and beyond.

RE: Bitter Beer Face?
By KristopherKubicki on 10/26/2007 2:16:12 PM , Rating: 3
I'm not a huge Facebook person, but to think MySpace is a "winner" while Facebook is a "loser" is totally asinine to me.

RE: Bitter Beer Face?
By Scorpion on 10/26/2007 3:10:29 PM , Rating: 3
I completely agree. I just recently "gave in" to joining the Myspace crowd because my girlfriend and all of her friends are on there. The social division there is so apparent to me. I am a graduate student, and she's never been to college, nor most of her friends, who are all on Myspace. Just completely different mentalities.

There are many many things that I like SO much better on Facebook. I'm honestly amazed that Myspace hasn't really updated the look and functionality of their site. Somethings feel so clunky and haphazardly thrown together on Myspace. Yet I find myself on there so much more often than Facebook just to keep in touch with her and some of our friends, as well as a few old friends.

I tell you what, all of the applications on Facebook are getting a bit much to me. I find myself scrolling miles and miles to find something on someones page. It's drawing in more of that Myspace mentality. :(

If facebook is worth that much...
By soulbabel on 10/26/2007 12:46:22 PM , Rating: 2
does that mean its creator is a bazillionaire too?

RE: If facebook is worth that much...
By Canizorro on 10/26/2007 1:41:06 PM , Rating: 2
Yes, I read somewhere that he is worth about 5 billion.

RE: If facebook is worth that much...
By tcsenter on 10/28/2007 12:21:08 AM , Rating: 2
Internet billionaire on paper. I have a funny feeling we've been here before (irrational exuberance). And entirely driven by the internet advertising model that accounted for the bulk of the dot.bomb bubble, no less.

I would cash out post-haste and convert that speculative paper-wealth into something real and proven...before its gone.

By mindless1 on 10/29/2007 1:27:02 AM , Rating: 2

None of these 'sites have real value even approaching 20% of estimates. ONE of them, maybe a couple will survive and meet expecations while the rest sink the money of those too feeble to put out before it's too late. One those few survive, THEN their value goes up but there's always going to be a new trend, a new generation that seeks to differentiate themselves.

MS was just a wildcard here, it was ludicrous to place value based upon what a company who treats real money like monopoly money, pays.

By thebrown13 on 10/26/2007 12:17:08 PM , Rating: 4
Google is asshurt, news at 11.

"Folks that want porn can buy an Android phone." -- Steve Jobs
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