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Loading ...The saga of Facebook’s incredible rise to the top continues. In this episode Microsoft is victorious over Google as the winner of a small but expensive stake in our heroic start-up. But of course this is just one episode, one battle, and it certainly does not predict what will happen at the end of the season, or determine who will eventually win the war for the largest share of the advertising market.
The announcement came yesterday that Microsoft would pay $240 million for 1.6% of Facebook - putting the value of Facebook at $15 billion (a far cry from the projected $100 billion given by others watching the scene).
I find one of the most fascinating details of this transaction the fact that part of it was negotiated via text messages. But there are some other interesting facts and observations about these big players in the internet game that you can take away from this news as well.
Here is the mini-feed:
1. Microsoft beat out bids from Yahoo! and Google for the stake in Facebook.
2. This was a personal victory for Microsoft over Google.
3. Microsoft will now be able to sell banner ads on Facebook outside the USA, splitting revenue with Facebook. They already had a deal to sell banner ads on Facebook inside the USA through 2011.
4. Google doesn’t seem too upset by Microsoft’s victory. “We don’t have to own every successful company on the internet,” said SergeyBrin, co-founder of Google.
5. Facebook says social networks are the future of the internet and defines itself as a “social computing” company.
6. Even though MySpace still has a larger corner of the market it is dismissed by investors because it is not growing as fast as Facebook.
7. Google defines the three core elements in their strategy: search, ads, and applications. Eric Schmidt, Google’s chief executive says there is plenty room to grow in each of these areas. The race is certainly in full-swing.
8. Facebook took $240 million (or is it $250? The NYT reported both numbers) and says it will double its staff.
9. Facebook may still be after investors. Will it take too much and spend it too fast?
10. If Facebook really is worth $15 billion, this equates it with the market capitalizations of the Gap Inc and Marriott International Inc. Not bad for a company that is only 3 1/2 years old.
Filed under: Abraham Harrison LLC
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[…] Check it out! While looking through the blogosphere we stumbled on an interesting post today.Here’s a quick excerpt […]
Well-done.