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Microsoft has just made a move on one of Silicon Valley's hottest pieces of property.

For weeks, rumors were swirling that Microsoft was wooing Facebook and considering investing in the social networking giant.

True to these rumors, the pair has finally gone public about their new partnership.  Microsoft has agreed to fork over $240 million USD to gain a minority share in Facebook.  The move gives it only a small percentage – approximately 1.6 percent -- of Facebook's net worth.  However, even such a small commitment between these two giants will likely have major ramifications in the software and internet industry.

According to accounts, internet media giant Google was narrowly beat out in intense negotiations by Microsoft.

The move raises Facebook's net worth to approximately 15 billion dollars. Interestingly this means that if each of the 50 million users of the social network had a price attached to them, based on the site's next worth, each would be worth approximately $306.12.

The move grants Microsoft some special benefits.  Microsoft gains exclusive rights to sell Facebook advertising.  Facebook's advertising reaches an international market of millions, so this is very useful.  Microsoft has already begun to sell ads on Facebook, as of yesterday.  The deal will last until 2011.

Like any good partnership, there is plenty of sharing -- the revenue from the advertisements will be split between Microsoft and Facebook.

Facebook certainly has its own perks, too -- it gets a large cash infusion, which it can use to hire new developers and expand its resources.  Facebook announced it plans to expand from its current 300 employees to nearly 700 within a year. It also gets assistance developing a robust advertising system.

The move is definitely a win-win for both parties. Kevin Johnson, president of Microsoft’s Platforms & Services division discussed the excitement about the new pairing:

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.  We’re very pleased with the scope and depth of our partnership.  It’s a big industry.  The equity stake we’re taking is a strong statement of confidence about this partnership.  Just sit back and watch how this partnership develops.  There’s a lot we’re going to do together.

Facebook was considered one of the most attractive software companies due to its torrid growth.  The network has been doubling its user base every six months.  Its growth has dramatically outpaced its chief rival in online social networking, Myspace.com.

Mark Zuckerburg, the creator of the network, and its CEO, often draws comparisons to Bill Gates.  He also has been the target of some recent suits from former classmates who claim he stole their idea (which may perhaps further increase comparisons to Gates).

Microsoft is not Facebook's only new interest, though.  Facebook has just entered into a partnership with Blackberry to make "Faceberry" phones...Blackberry phones preloaded with Facebook access and functionality.  Facebook's new software for the Blackberry will make use of its push email system to access user's accounts.  Users will even be able to take pictures and create tags for them.

Facebook also recently announced grants of up to $250,000 for software developers who can present new ideas for Facebook applications, as reported at DailyTech.

The future is certainly looking bright for Facebook.  With its new partnership with Microsoft, the world's largest tech partnership, an exciting world of possibilities opens up to the network and its users.


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RE: the secret
By tspinning on 10/25/2007 10:57:10 AM , Rating: 4
Sorry but that's not entirely true,

Facebook started out as all great things do, private, "elite", special. ({{(OiNK)}})

You had to have a .edu email account and attend a college to be a member, believe it or not, this did weed out a majority of the retards, they didn't make it to college remember. Also the sites lack of (THANK GOD) html meant that people couldn't use the [blink] code that drove all the rest of us nuts, or embed insane java script to induce seizures after a moments viewing, or blast you with the new puff daddy song or start playing 5 YouTube videos.

However, if you had already graduated college, you probably never bothered to join when the book opened it's doors, or if you did, you forgot half the people you used to meet at the local keggers.

Younger generations have much larger social pools to swim in then anyone before, it's impossible to keep in touch with everyone you ever knew, but all the old classmates that you associated with in the halls might like to see you from time to time, or know when you get married, for this, Facebook's easy to use, clean interface is tops.

Also allowing small developer content is engaging a new sect of programmers to create. Nothing wrong with this!


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