Microsoft buys stake in Facebook
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The thus far unprofitable but hugely popular social networking site is tipped to make $30...
Software titan Microsoft has bought a $240 million stake in Facebook in a deal that values the fantastically popular social networking site – which has yet to make a profit – at no less than $15 billion.
Microsoft will take a 1.6% stake in the US website’s next round of financing and the companies will continue to expand their existing advertising partnership, reports the FT.
While the software giant already provides banner advertising and links on the site, the deal seals Microsoft’s exclusive relationship with Facebook to serve ads, seeing off major competitors, chiefly Google.
Mark Zuckerberg, the site’s fiercely independent founder, rebuffed a $1 billion takeover offer from Yahoo last year.
Facebook allows users to create customised web pages, and to share content and information with friends in both public and private forums. Its 50 million users globally makes it a potentially highly profitable advertising magnet, not least because its membership is growing at a faster rate than that of its nearest rival, MySpace.
The site expects to make a $30 million profit this year, a result that would nevertheless over-value Microsoft’s stake.
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