$240M Investment of Microsoft Into Facebook
One of the most popular social tools on the Internet Facebook Inc. is also one of the most rapidly increasing websites. Recently the site has sold its 1.6 percent stake to the software giant Microsoft Corp. who was willing to pay $240 million for it.
The negotiations of the deal lasted several weeks and finally the announced came on Wednesday, October 24, 2007. The Palo Alto-based Facebook is valued at $15 billion, which was accumulated in less than 4 years after its founder, Mark Zuckerberg, thought of launching an online social network, while studying in Harvard University.
The software giant, Microsoft, also looks forward to sell Internet ads for the social networking site, as Facebook continuous its expansion in the United States.
After Zuckerberg rejected the offer of another giant Yahoo Inc. to take over the site for $1 billion last year, the money coming from Microsoft should be quite enough for investing in ambitious expansion plans of Facebook before the social networking site goes public.
Zuckerberg announced that he is willing to refrain for two or more years from the initial public offering. Now, however, Facebook has the potential of turning into an advertising magnet. This is because it is significantly increasing its audience, the number of whom today is equal to 50 million active users, who use the tools of the social network, such as messaging, photo-sharing, to get in touch with friends.
"Making this investment ... is a great win for not only for our two companies, but also our collective users and advertisers," outlined in a statement the president of Microsoft's platforms and services division, Kevin Johnson.
Despite the fact that MySpace, owned by News Corp., still remains the biggest and most popular social network on the web, Facebook has registered a very fast growth during 2006. The site attracted about 30.6 million visitors from the United States only throughout September.