Print 78 comment(s) - last by senbassador.. on Oct 27 at 4:39 PM

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,

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.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Pointless
By borowki on 10/25/2007 12:37:12 PM , Rating: 4
You're missing the point completely. The reason many people found Facebook useful is that it allows them to maintain friendship with people who aren't really their friends anymore. I have a "friend" who works in Kabul, for example. If I contact her directly, what am I going to say? "The weather's is crappy here in Europe, but at least we got no suicide bombers?" We have nothing to talk about. Yet, it's benefitual to keep in touch.

RE: Pointless
By blaster5k on 10/25/2007 1:03:48 PM , Rating: 1
A somewhat cynical way of looking at it I think. You can still be friends with people even if they've moved away, but not with that kind of an attitude.

RE: Pointless
By SirLucius on 10/25/2007 2:33:59 PM , Rating: 2
I think he was speaking more to keeping in contact with acquaintances. I am "friends" with plenty of people of Facebook that I don't hang out with regularly or would even really consider to be a "friend." I have nothing against them, but I don't know them well enough to call them anything more than a casual acquaintance. In this sense, Facebook is a great way to keep in contact with people you wouldn't be comfortable calling up just to shoot the breeze or hang out with outside of a social situation.

RE: Pointless
By kinnoch on 10/25/2007 2:45:42 PM , Rating: 2
His point is that you know a lot of people, but even the most social person can only keep in close contact (or care to keep in close contact) with so many people. this doesn't mean that its not beneficial to keep some minimal amount of connection with some one you haven't seen for years. In fact a facebook update could bring old friends back together. I know i got back in contact with an old high school friend after I saw some incredible photos he had posted on facebook due to a common interest in photography.

"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
Related Articles

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
No More Turtlenecks - Try Snakables
September 19, 2016, 7:44 AM
ADHD Diagnosis and Treatment in Children: Problem or Paranoia?
September 19, 2016, 5:30 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki