Young Love: Microsoft Wins Share of Facebook
October 25, 2007 9:15 AM
comment(s) - last by
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
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,
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.
This article is over a month old, voting and posting comments is disabled
10/25/2007 12:54:20 PM
Yeah, but in my age range (mid-20s), basically everyone has an account, so it's a non-issue. E-mail addresses change. Phone numbers change. Facebook persists.
10/25/2007 1:11:50 PM
I would have to disagree. I don't know anyone personally that has a facebook account.
10/25/2007 1:57:33 PM
Your then probably not the target demographic. While now open for anyone to join, it was made for the college audience. I can't think of anyone at UF (where I'm at), who doesn't have an account. I'm a Resident Assistant for a dormitory, and making events and sending it out to a very specific group of people can't be easier. Evite.com is dumb. Who in the world keeps an updated list of 500+ peoples email? (friends, staff, academic club lists). I don't need to know if Joe Blow changed his email from
.75% of my classes have groups on facebook to send out canceled class messages, and share notes for missed lectures. It also integrates media extremely well. For example, I have a History of Rock and Roll class, which a TA created a facebook group for. I can watch relevant youtube videos from class, create a study group, and contact class mates. O, and I talked to this really great looking girl, but what was her name....ok here's her picture....right...Mindy.....(message Mindy). Sarcasm aside, you can see it has practicality if you're in their target market.
“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith
Facebook Offers Cash Reward for Programs
September 20, 2007, 10:00 AM
Judge Asks for More Proof on Allegations Against Facebook
July 26, 2007, 8:52 AM
AT&T Defeats Purpose of New Apple SIM, Locks iPad Air 2 Users to Its Network
October 24, 2014, 2:17 PM
Microsoft to Discontinue Free, Ad-supported Xbox Music Service on December 1
October 23, 2014, 10:03 AM
Christian Bale Confirmed to Play Steve Jobs in Upcoming Film
October 23, 2014, 8:43 AM
Monica Lewinsky Speaks Out, Calls Herself "Patient-Zero" for Internet Cyberbullying
October 21, 2014, 2:25 PM
Google Fiber Finally Heading to Austin, Texas in December
October 16, 2014, 11:48 AM
Dropbox Flexes Security Muscle, Appears to Have Squashed Password Breach
October 15, 2014, 12:12 PM
Most Popular Articles
Chinese Government Declares Digital War Against America's Top Tech Firms
October 20, 2014, 12:07 PM
Report: 2015 Ford Focus Electric MSRP Slashed by $6,000, Will Retail for $29,995
October 18, 2014, 6:23 PM
Apple Releases iOS 8.1; Adds Apple Pay Support, SMS Relay, Instant Hotspot
October 20, 2014, 1:00 PM
Windows 8.1 + Android "Sell Mini PC" w/ Bay Trail Creates New PC Form Factor
October 20, 2014, 5:07 PM
Update: Motorola Droid Turbo Coming Oct 28, 48-hour Battery Life Confirmed
October 19, 2014, 9:19 PM
Latest Blog Posts
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information