Guide Note

Microsoft announced on October 24, 2007 that it was acquiring a portion of Facebook, the company based in Palo Alto that runs a social networking by the same name. Microsoft reportedly valued Facebook's net worth at $15 billion. It paid $240 million to acquire 1.6% of the company.¹

Fast Facts

Microsoft acquired 1.6% of Facebook
Deal announced on October 24, 2007
Paid $240 million
Valued Facebook's total worth at $15 billion
Large total was surprising, given Facebook's relatively small size at the time of the deal

Industry Reactions

$15 billion was considered a high price-tag for Microsoft to place on the relatively young Facebook. Many analysts stated that the pricing was not necessarily an accurate reflection of Facebook's true worth.² Possible reasons for the inflated pricetag include Microsoft's desire to break into the social networking market,³ as well as increased control of advertising space on the Facebook website.²

Categories

Business News | Business and Finance | Technology | News

View Note History

Microsoft Invests in Facebook

Mahalo Top 7

NewsVine.com: Microsoft Deal Values Facebook at $15B (October 24, 2007)
TIME: MySpace v. Facebook: Competing Addictions (October 24, 2007)
Times Online: Analysts Defend $15 billion Facebook Valuation (October 25, 2007)
Wired Blog: Three Reasons Microsoft Paid So Little For Facebook (October 24, 2007)
ZDNet Blog: Google’s Sergey Brin: ‘We don’t need to own everything…’ (October 24, 2007)
Seattle Times: Microsoft-Facebook Deal: Highlights from the Call (October 24, 2007)
BusinessWeek: Microsoft Nets Piece of Facebook (October 24, 2007)

Microsoft Invests in Facebook News

Google News: Microsoft Invests in Facebook
FoxNews.com: Microsoft, Google Face Off Over Facebook (October 24, 2007)
CNNMoney: Microsoft to acquire $240M stake in Facebook... (October 24, 2007)
PC Magazine: Microsoft Pays $240M for Stake in Facebook (October 24, 2007)
Bloomberg.com: Microsoft Pays $240 Million for Stake in Facebook (October 24, 2007)
USAToday.com: Microsoft Buys a Bit of Facebook (October 24, 2007)

Microsoft Invests in Facebook Blogs and Commentaries

TheStreet: Microsoft Takes Stake in Facebook (October 24, 2007)
MarketWatch: Microsoft to acquire significant stake in Facebook (October 24, 2007)
New York Times: Microsoft to Pay Million for Facebook Stake (October 24, 2007)
ValleyWag: Facebook goes to Microsoft? (October 24, 2007)
Motley Fool: Go Public Now, Facebook (September 25, 2007)
All Things Digital: 15 Billion More Reasons to Worry About Facebook (September 25, 2007)
Google Blog Search: Microsoft Invests in Facebook

Microsoft Invests in Facebook Background

CBS News: Microsoft, Playing Catch-Up, Woos Facebook... (September 25, 2007)
All Things Digital: How High Can You Count: New Facebook Fundraising? (September 11, 2007)
New York Times: MySpace and the Facebook Factor (September 25, 2007)
Mercury News: Facebook valuation would place it it among valley's top 25... (September 25, 2007)
New York Post: M'soft Looks to Facebook if Yahoo! Won't Play (September 25, 2007)

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