Microsoft seeks Facebook stake

Microsoft and Google express interest in Facebook, valued at around US $10 billion

Microsoft has approached Facebook in recent weeks proposing an investment that would give Microsoft a stake of up to 5 percent in the popular social-networking company, The Wall Street Journal reported Monday.

With Microsoft willing to invest between US$300 million and US$500 million, the deal would value Facebook at US$10 billion or more, the Journal reported, quoting anonymous sources.

Google has also expressed an interest in acquiring a Facebook stake recently, according to the Journal. Thus, Microsoft could find itself competing for Facebook's attention with Google.

However, Facebook's discussions with Google and Microsoft are in the early stages and could end up with no agreement with either suitor, according to the Journal.

Reached by IDG News Service, Facebook, Microsoft and Google declined to comment.

Founded in February 2004, Facebook is one of the world's most popular social-networking sites with about 42 million active users. Facebook has been growing strongly in the past 12 months. In December, it had about 12 million active users.

The site initially only admitted students, but last September it lifted that restriction. In May of this year, it opened up to third-party developers to create applications for the site, which has also added to its popularity with users.

Along the way, it has caught the attention of big Internet players like Microsoft, Google and Yahoo. The latter reportedly tried to buy Facebook last year for US$1 billion.

Facebook's attractiveness is that it builds very strong and deep relationships with its users. Over half of its active members return to the site daily, and Facebook knows a lot about them, thanks to all the personal information people disclose on their site profiles and interactions with other members.

This, in turn, offers a desirable audience to advertisers and to ad sellers and distributors like Google, Microsoft and Yahoo. A little over a year ago, Facebook chose Microsoft to display banner ads on the site.

"Facebook may well be one of the most important platforms in the future, and Microsoft controls platforms like Windows and IE, so it's important for Microsoft to work with Facebook," said Josh Bernoff, a Forrester Research analyst.

Allen Weiner, a Gartner analyst, said that by acquiring a stake in Facebook, Microsoft could deepen its existing relationship with the company, possibly in the area of "widget" applications. Through an investment, Microsoft could also potentially keep rivals Yahoo and Google away from Facebook, Weiner said.

Facebook would be interested in using the cash raised from selling a stake for buying other companies, increasing its staff of about 300 and beefing up its technical infrastructure, the Journal reported.

Facebook is also weighing the option of raising funds from financial investors, the Journal said.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Essentials

Brother MFC-L3745CDW Colour Laser Multifunction

Learn more >

Mobile

Exec

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?