
One of the most successful social network sites on the planet (5
th Largest I beleive) sold a slice of itself to Microsoft for $240,000,000. Earlier CEO, 23 yr old Mark Zukerberg spurned a take over bid by Yahoo for $1,000,000,000. That is 1 cool billion. With Microsoft coming to the plate for a 1.6% share at 240 million, it allows for Facebook to complete it's ambitious expansion plans and maintain ownership. Facebook CEO Zukenberg will consider a public offering in a couple years, no doubt believing that the company will be worth no less than 10 times what Yahoo tried to snag it for.
The Facebook site with it's 47 million users has really been sort of an experiment in that it no longer limits it's attraction to college kids but opened itself up to anyone that was interested. There is currently no commonality in the specific traits of its users and it allows anyone to jump in, in a sort of free for all, at least as far as not directing it to one group or another.
Facebook will likely experience some real growing pains and to be sure aligning itself with Microsoft will provide needed liquidity and actually is a stroke of genius. Not that the site itself wasn't.
To get specific here, Microsoft bought a 1.6 % stake in Facebook and Google who was in the hunt as well, must not have seen the same value as Microsoft who needs to increase it online advertising. Microsoft will sell ads that will appear when Facebook users (over 47 million users to be exact ) use the Windows On Line service, Microsoft Smart Phones and even the X-box online gaming site.
Microsoft in seeking to increase that ad revenue with its new base on Facebook, currently reporting about 1.8 billion a year in on-line ad revenue. Google by contrast is in the range of 13.3 Billion in ad funds revenue. But with its $240 million investment, it's like just seed money for the if and when, they may be able to get a bigger share. Microsoft probably feels pretty good in beating out Google, the clear online revenue generating machine title holder.
Don't we all just love Capitalism!
I'm first...be back.
Okay, so if you and I buy some stocks in Facebook we'll be rich? I wonder if those guys even have to work any more.