Microsoft gets it’s claws into Facebook

October 25, 2007

Okay, maybe a little harsh as headlines go…

Microsoft has invested $240m in Facebook. This guarantees Microsoft the position of exclusive third-party advert provider to the social network. It also gives them a measly stake in the company of under 2%. Facebook has said that it may well take extra funding from other parties in this round of financing.

Great news for Facebook; they go the money they’d been looking for.

Great news for Microsoft; they’ve secured a highly lucrative advertising deal and got their feet under the table at the biggest thing on the internet (currently). Although the ad revenue is shared with Facebook the potential to get their ads in front of eyeballs is huge and will be a big draw for publishers.

The deal has valued Facebook at $15b; that’s a massive sum for a site that isn’t returning huge revenues yet. They need to start bringing in the bucks if they are going to keep an investor like Microsoft happy, they won’t sit back on their laurels and just be happy with the ad revenue, they’ll want to see a return on their investment of some form.

Could we see the integration of the Facebook platform with Office Live, Live Search and Live Mail? That would be a coup for Microsoft and give them the honour of being part of the biggest webtop platform going.

I’m guessing that both Microsoft and Facebook will see this as one in the eye for Google (seeing as Google would have loved to have been a part of this) but I reckon Google may have something up it’s sleeve (it usually does).

Edit: Mashable is reporting that Facebook may have secured a further $500m from two hedge funds. The source of this info is not confirmed yet.

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