Andrew Rollins Technology, entrepreneurship, the Internet, and video games

Microsoft Makes Investment and Advertising Deal with Facebook

Microsoft will invest $240 million for a 1.6% stake in Facebook. This investment will extend Microsoft's advertising deal with Facebook, allowing Microsoft to run Facebook ads internationally (as opposed to the previous arrangement which only covered ads within the United States). For the full story, see Microsoft to Pay $240 Million for Stake in Facebook at the New York Times web site.

An investment of $240 for a 1.6% stake means Microsoft is valuing Facebook at $15 billion. Let's not forget that it was roughly a year ago when Yahoo was in talks to buy Facebook for $1 billion. It appears that Mark Zuckerberg had the right idea when he turned down Yahoo, and I have to say I agreed with him.

What some people continually fail to realize is that Mark isn't trying to sell a company, he's trying to run a company. Zuckerberg isn't trying to earn a quick buck for a bunch of venture capitalists high on Web 2.0, he's pursuing a vision and adding value to the world. Unlike Myspace and its confused Rupert Murdoch, Facebook has a purpose. This won't be the last time we see Facebook's valuation grow.

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