Microsoft Wants A Piece of Facebook?

September 25th, 2007 | Categories: acquisitions, financing, markets, networks, social media, strategy

Facebook new logoOnce again, Facebook rumours are all the talk in the blogosphere. The newest gossip, courtesy of the Wall Street Journal, states that Microsoft is in talks to buy a 5% stake in Facebook for a reported $300-500 million. But the plot thickens… The article goes on to say that Google may also be interested in buying a stake of its own, further upping the ante.

Surprisingly, we’re not hearing about any full-blown acquisition rumours anymore. Why not? No-one can afford the damn company anymore. Apparently, Microsoft is pegging the social network at a current valuation of $10 billion. Are you kidding me? The company is only slated to pull in $150 million in revenues this year. Now, I’m not a financial analyst, but I can tell you that such an amount is rather ridiculous based on historical valuation methods. Furthermore, previous acquisition talks this year started at $1 billion and escalated to a seemingly preposturous $6 billion.

And get this… Facebook may be turning down the high profile deal in hopes of attaining a $15 billion valuation. Yes, you heard me right. The bubble may be closer than we think. Either that or Zuckerberg’s ego has ballooned to Donald Trump-like proportions.


  1. david Says:

    All of this seems to proves that Yahoo! was infinitely foolish…

  2. Stephen Albinati Says:

    I agree Aidan.

    First it was $1 Billion, then $6 Billion, $10 — well why not throw around the $15 Billion number?

    Sure they are growing at 3% a week, but really that can only go on for so long.

  3. Anthony Sukow Says:

    Zuckerberg… Do you think he might just like what he does? It actually is a pretty good deal. If he really doesn’t want to sell any peice of it(Facebook), and it(FB) is growing very fast… then his negotiation power is nearly infinite… At the same time you have advertisers that are super hungry for eyes and facebook has a lot of eyes every day…So they have a high perceived demand…

    That creates the environment of super inflated valuations. 1 Person that doesn’t want to sell, and 1 group desperate to buy!

    …maybe he is just happy? I don’t know. He just doesn’t seem like an ego maniac.

    It is hard to create MOJO.

    What would you pay for Coca Cola 100s of years ago given what we know about the company today. Maybe others think they see the future…

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