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Microsoft to Pay $240 Million for Stake in Facebook

ScuttleMonkey posted more than 5 years ago | from the facebook-laughing-all-the-way-to-the-bank dept.

Microsoft 277

Nrbelex writes to mention The New York Times is reporting that Microsoft has beat out Google and Yahoo for a 1.6% stake in Facebook. The investment will cost Microsoft $240 million valuing the total site at somewhere around $15 billion. "The astronomical valuation for Facebook is primarily evidence that Microsoft executives believed they could not afford to lose out on the Facebook deal. Google appears to be building a dominant position in the race to serve advertisements online. Fearing it might lose control over the next generation of computer users, Microsoft has been attempting to match and in some cases block Google's plans, even if that effort is costly."

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277 comments

The next Big thing, again (5, Insightful)

ackthpt (218170) | more than 5 years ago | (#21105705)

After hearing so much about mySpace I finally surfed it, set up a page and looked around. It's all rubbish. People ask to join your list of friends to spam you and the interface is clunky at best. I think such a site would be a good idea, but their implementation falls short of the mark by leagues.

Along comes Facebook, cleaner interface, perhaps better ability to keep crap from showing up in comments or messages people send you. Hopefully if you are spammed there's an actual admin who gives them the boot, though it's quick and easy to join so an abuser will likely create accounts as needed for pest purposes. When rot sets in people will leave and go to the next big site, leaving mySpace and Facebook to host an ever shrinking group willing to put up with crap.

Two hundred forty! Million! Dollars!? IIIIII'mmmmmm the CAAAAAT! Seriously this is great news for those who hold ownership in this site, they'll rake in a very considerable profit.

Re:The next Big thing, again (1)

FudRucker (866063) | more than 5 years ago | (#21105981)

now that microsoft owns facebook you will only receive microsoft approved spam...

good thing many people have the sites sourcecode (0)

Anonymous Coward | more than 5 years ago | (#21106005)

it was hacked recently and many people are making clones from the exact source

Re:good thing many people have the sites sourcecod (5, Insightful)

Dionysus (12737) | more than 5 years ago | (#21106219)

it was hacked recently and many people are making clones from the exact source
Isn't having the source pretty irrelevant? Isn't the community, as in the people using the site, that matter? You could create an exact same site using the same code, call it, Friendster, and if nobody shows up, does it matter?

Re:good thing many people have the sites sourcecod (0)

Anonymous Coward | more than 5 years ago | (#21106585)

no it does'nt.. people left myspace for facebook.. and people will leave facebook for something else.. people WILL show up reguardless.

Re:The next Big thing, again (1)

Kalriath (849904) | more than 5 years ago | (#21106427)

Wow. Since when has 1.6% entailed a controlling stake? Microsoft doesn't "own" Facebook in any sense of the term. They merely hold a 1.6% stake. Enough to get dividends if it profits, and maybe have one vote out of a hundred at meetings.

Re:The next Big thing, again (3, Insightful)

moderatorrater (1095745) | more than 5 years ago | (#21106049)

I disagree with the summary saying that it shows the company is worth $15 billion, that's ridiculous. It's an exclusive advertising deal with a small share of the company thrown in for good measure. The real question is, how much of that $240 million is for the advertising and how much is for a share of the company? My guess is that the majority (75+ percent) is for the advertising.

What I really think this shows is that Microsoft thinks Facebook, and not myspace, is going to be dominant soon and for a long time. Facebook has the better interface and the better look/feel, and their user base is exploding. However, I also agree with the parent in saying that people will soon be leaving facebook for greener pastures. If the dot-com boom and embarrassing posting on slashdot about being worthy a lot of money are any indication, the owners should start selling their sharesnow, getting some of the insane wealth in case they can't get it later.

Re:The next Big thing, again (4, Insightful)

2ms (232331) | more than 5 years ago | (#21106061)

I disagree. People care much less about how clunky the interface is etc than they do about where their friends are. Right now everyone (of the generation that is using these sites ie college students and younger, primarily) and their pet duck is on Facebook and/or MySpace.

These are social sites. They are useless without the people you socialize with being on them too. MySpace and Facebook, thus, have it very good for the future.

Re:The next Big thing, again (2, Interesting)

MrAnnoyanceToYou (654053) | more than 5 years ago | (#21106431)

The Internet is the biggest Social Networking site on the planet, and all these subcategories of it are going to be less and less important as larger percentages of the populace can build their own little inter-communicative sites.

Re:The next Big thing, again (2, Interesting)

ackthpt (218170) | more than 5 years ago | (#21106523)

The Internet is the biggest Social Networking site on the planet, and all these subcategories of it are going to be less and less important as larger percentages of the populace can build their own little inter-communicative sites.

Perhaps the real money is in creating a site which allows people to tie all their memberships together across these social networking sites. Should that happen, I predict lawsuits -- they don't want you to go anywhere else and they'll do anything to stop you within their power. But it would be a neat idea.

Re:The next Big thing, again (0)

Anonymous Coward | more than 5 years ago | (#21106079)

Remember that MS also paid $10,000 US per WebTV user.

Re:The next Big thing, again (0)

Anonymous Coward | more than 5 years ago | (#21106207)

Fox pays $580 for myspace. Google offered Friendster $30 million (which they turned down, incredibly.) Microsoft buys Facebook. But will any of these even be around in five years?

In fact it seems like an incredibly foolish purchase to me, as the teens and college kids of 2009 will see today's social network sites as incredibly lame. That's the nature of marketing "cool." It has a short shelf life before it's a joke. The target audience wants to be one of the first to discover a brand new thing and have no brand loyalty, they will jump ship in a heartbeat when something better comes along. Web sites are particularly vulnerable to this; it costs relatively little to launch a new one.

Not only that, but in a kind of perverse way these sites are much less in demand when . So when "everybody" is on myspace, it becomes lame, the trendsetters move on and the rest quickly follow. Myspace is already fading, "old news." Friendster? That feels as out-of-date as Grunge. And Facebook is about to hit the wall itself.

Do the media giants not see this, or is it really worth the money and I'm just missing the point? (after all what do I know, I make $60,000 a year?)

Re:The next Big thing, again (1)

zgregoryg (1061612) | more than 5 years ago | (#21106329)

Up is down, down is up. Say Hello when leaving, goodbye as a greeting. AAPL's marketcap is worth more than IBM and Facebook is worth $15 billion

Re:The next Big thing, again (1)

scottrocket (1065416) | more than 5 years ago | (#21106495)

Say Hello when leaving, goodbye as a greeting.

Bizzaro Google smiled wryly; "Me can't believe they fell for it - it all coming together now".

Re:The next Big thing, again (1)

cytg.net (912690) | more than 5 years ago | (#21106501)

how many gazillions does microsoft have anyway ? .. seems like they're making the frontpage pretty often with a multimillionbillion out of pocket exchange ..

Re:The next Big thing, again (3, Insightful)

Professor_UNIX (867045) | more than 5 years ago | (#21106659)

Facebook and MySpace are the 21st century equivalent of Geocities. How many billion dollars do you think they could sell Geocities for these days? Remember, Geocities used to be VERY popular with idiots setting up free websites, just like MySpace and Facebook today. Anyone that spends more than $1000 investing in these fly-by-night sites is a complete fool or is looking to cash in on the pyramid scheme.

adblock (1, Redundant)

middlemen (765373) | more than 5 years ago | (#21105725)

Use adblock and give the finger to MSFT.

Well, it's better than... (5, Funny)

Facetious (710885) | more than 5 years ago | (#21105735)

... a stake in the face, I suppose.

to translate (5, Insightful)

User 956 (568564) | more than 5 years ago | (#21105741)

Fearing it might lose control over the next generation of computer users, Microsoft has been attempting to match and in some cases block Google's plans, even if that effort is costly.

In other words, they didn't spend $240 million for 1.6% because Facebook is worth $15 billion. They paid $240 million because they're in the middle of a pissing match with Google.

Re:to translate (4, Funny)

Savage-Rabbit (308260) | more than 5 years ago | (#21105859)

....because they're in the middle of a pissing match with Google.
Are they competing for distance or accuracy?

Re:to translate (5, Funny)

SamP2 (1097897) | more than 5 years ago | (#21106031)

Are they competing for distance or accuracy?
Volume.

Re:to translate (1)

Fizzl (209397) | more than 5 years ago | (#21106145)

Best retort ever...

Re:to translate (2, Funny)

jc42 (318812) | more than 5 years ago | (#21106037)

....because they're in the middle of a pissing match with Google.

Are they competing for distance or accuracy?

Hey, this is Microsoft we're talking about. When have they ever worried about accuracy in anything they did?

Re:to translate (2, Insightful)

ShiningSomething (1097589) | more than 5 years ago | (#21105879)

Exactly. Buying 1.6% does not mean they think the company has a future. But it probably makes it less likely that Google or Yahoo will take over the company, right?

Re:to translate (5, Funny)

ackthpt (218170) | more than 5 years ago | (#21105909)

Fearing it might lose control over the next generation of computer users, Microsoft has been attempting to match and in some cases block Google's plans, even if that effort is costly.
In other words, they didn't spend $240 million for 1.6% because Facebook is worth $15 billion. They paid $240 million because they're in the middle of a pissing match with Google.

Actually I blame it on bad Bistromathics, someone took one too many toothpicks from the bowl by the register and there's an extra mustard stain on the tablecloth.

And Adobe... (4, Insightful)

beakerMeep (716990) | more than 5 years ago | (#21106039)

Some have speculated that this could be a move to drive adoption of the Silverlight plugin to compete with Adobe's flash. There is evidence that could work too. When MySpace was hacked that involved some clever javascript and a SWF, the admins pushed Flash Player 9 (which had added security) on the userbase and it's adoption rate, many have speculated, is largely due to that. One of Microsoft's biggest challenges with unseating Adobe's Flash is it's insanely high adoption. (something like 95% of computers have flash 8) and now they just bought into a userbase of 20 million "early adopters." Will it be effective? who knows. But I would be surprised if we didn't start seeing Silverlight widgets and ads on facebook.

Re:And Adobe... (-1, Troll)

Anonymous Coward | more than 5 years ago | (#21106091)

That's why this deal sucks, not that I use facebook just that I want to see Silverlight die the death it so obviously deserves.

Re:And Adobe... (-1, Troll)

Anonymous Coward | more than 5 years ago | (#21106345)

except nobody gives a shit about silverlight

Re:And Adobe... (4, Informative)

jalefkowit (101585) | more than 5 years ago | (#21106663)

Conspiracy theorists will take note that there is a tag for inserting Silverlight elements into your Facebook app [facebook.com] in FB's pseudo-HTML markup language, FBML [facebook.com] . The only other formats to receive this support (inserting rich content with a single tag) are Flash and MP3.

Re:to translate (1)

ArwynH (883499) | more than 5 years ago | (#21106131)

The fact that MS was willing to pay $240 million for 1.6% makes Facebook worth $15 billion, since a company (or anything for that matter) is worth what someone is willing to pay for it.

The profit the company makes is just one of the factors that determines how much investors are willing to pay. Sometimes investors consider other factors more important. In this case MS decided that Facebook was worth $15 billion to them and since there is at least 1 investor willing to pay that much, that is what the company is worth.

Before everyone screams 'bubble'..... (2, Funny)

wamatt (782485) | more than 5 years ago | (#21105745)

Can I be the first?

Re:Before everyone screams 'bubble'..... (1)

Fizzl (209397) | more than 5 years ago | (#21106171)

I'd love to have some kind of "Web 2.0" piece of shit right now...
Actually I have, but they are in Finnish and no-one is interested about 5M potential customers.^W^Wadd viewers.

Re:Before everyone screams 'bubble'..... (0)

Anonymous Coward | more than 5 years ago | (#21106305)

First bubble post!

Simple API (4, Interesting)

SIGALRM (784769) | more than 5 years ago | (#21105767)

From TFA:

The high valuation also represents a belief that Facebook is creating an important new operating system -- one that exists on the Web instead of on personal computers.
I'm not sure how a valuation is capable of representing a belief, but it does reflect an acknowlegement of important trends. Facebook's platform [facebook.com] is similar to other "Web 2.0" RESTful APIs but is pretty simplistic (i.e. CanvasPages--which is basically an IFRAME, alerts, feeds, and privacy settings, etc.). Don't expect a RoR framework or anything close to Google's API.

Re:Simple API (5, Informative)

MLCT (1148749) | more than 5 years ago | (#21106121)

is creating an important new operating system

You really have to wonder if the people writing these articles - and this is the NYT as well - have a clue. I mean words can't really describe how flawed it is to suggest a website API (and as the parent points out, a simplistic & fairly inadequate one compared to others) equates to an OS. It seems that the journo's are happy to get caught up in "beliefs" that - when you actually sit down and say "hang on, lets genuinely have a look at the facts here" - sums up to be a big pile of vacuous SFA. Someone needs to fire a bolt of reality into this lot, we (on here) are all happy to point out the basic truth that it is a bubble and it will burst, but it goes beyond that now - even the supposed objective commentators are blowing air into the bubble.
As for MS's purchase - we all know they have more money than sense - but I didn't realise it was that much.

Re:Simple API (1)

Migala77 (1179151) | more than 5 years ago | (#21106307)

The high valuation also represents a belief that Facebook is creating an important new operating system -- one that exists on the Web instead of on personal computers.
I'm not sure how a valuation is capable of representing a belief
All valuations are by definition a representation of a belief; the value of a company is the present value of the combined future cashflows. Thus a valuation is nothing but an expectation of the future profitability of a company.

This doesn't mean that Microsoft expects Facebook to be this profitable, MS has other interests than the typical investor as 'User 956' noted earlier (http://slashdot.org/comments.pl?sid=338933&cid=21105741 [slashdot.org] ). But if Facebook, as some expect, will be the #1 source of commercially interesting consumer data (what they like, what their friends like, where they live, etc.), they will take big advertisement $$$. Microsoft definitely wants a piece of this.

Yeah, but what IS Facebook? (0, Flamebait)

mckwant (65143) | more than 5 years ago | (#21105769)

Not trolling, curious, and not about to set up a page just for the fun of it.

I am curious, but yellow.

Re:Yeah, but what IS Facebook? (1)

cromar (1103585) | more than 5 years ago | (#21105963)

Ummm... a social networking site...

Re:Yeah, but what IS Facebook? (1, Troll)

friend.ac (1071626) | more than 5 years ago | (#21106017)

Facebook is a social networking site. Allowing you to stay up-to-date with friends and family, as well as finding new friends that fit your likes/dislikes. It also allows you to setup evites, groups, etc... very similar to the Yahoo/Excite portals years ago, where they try and make the site central to you.

As to the users that state they hate facebook.com and myspace.com.. that's exactly why I started http://friendsite.com/ [friendsite.com] kind of a mix of both... I'm just hoping that it makes me (with little finger in my mouth) 15 BILLION DOLLARS HA HA HA HA HA

Re:Yeah, but what IS Facebook? (1)

MightyMartian (840721) | more than 5 years ago | (#21106051)

Do you have anything for those of us who think that these sites are a den of perverts, morons and the most pathetic and worthless pieces of human detritus to ever inhabit the face of this rather silly planet? Perhaps you can call it EatMyShortsYouFriendlessPussies.com.

Re:Yeah, but what IS Facebook? (4, Funny)

bigstrat2003 (1058574) | more than 5 years ago | (#21106235)

Yeah, there is, but that domain is just a redirect to slashdot.org.

Re:Yeah, but what IS Facebook? (1)

insertwackynamehere (891357) | more than 5 years ago | (#21106367)

Good job showing your ignorance of Facebook. You sound like a fear mongering Parenting magazine from 1997 talking about "chatrooms". How about you do some research and learn that Facebook is designed to assist real life, not define a new one. Facebook friends are usually real life friends and Facebook offers a means of communicating with them that is more versatile than email. Meanwhile, you're posting on Slashdot to people you don't even know...

Re:Yeah, but what IS Facebook? (1)

Gabest (852807) | more than 5 years ago | (#21106259)

We must be living under a rock 'cause I've also just became familiar with this NEXT BIG THING.

Cheers! (0)

Anonymous Coward | more than 5 years ago | (#21105771)

I tip my hat to the badass that turned down $Billion from Yahoo several years ago.

Yahoo would have lamed down the site to the point of being unusable. Instead he made social networking cool again.

Bravo!

MyFaceYouBook (4, Insightful)

Audent (35893) | more than 5 years ago | (#21105783)

I'm sorry but this is ridiculous. MySpace was the last Next Big Thing and is losing users to FaceBook at a tremendous rate. Facebook will face the same fate and so will the next one and the next one and so on.

In six months' time Facebook will be "worth" half that and in a year it'll be worth nothing.

I like social media, I think it's highly useful and may very well change the face of the internet in the same way the web changed the face of traditional media like newspapers, but this is Dot Com Bubble 2.0 as far as I can see. Crazy prices for Crazy products. Good on them for making the $$$$ but seriously ... it's insane.

Re:MyFaceYouBook (1)

ackthpt (218170) | more than 5 years ago | (#21105847)

In six months' time Facebook will be "worth" half that and in a year it'll be worth nothing.

I'll pick it up at the liquidation sale and rename it VirtualWasteland. It's sure to be a hit with counter-culture crowd and I'll be able to sell 1.6% of it to Microsoft again! =)

Re:MyFaceYouBook (1)

2ms (232331) | more than 5 years ago | (#21106117)

Where do you get that people are quiting MySpace for Facebook? Do you care to support the basis of your opinion with any kind of facts, figures?

I think you are wrong -- I think they are both growing exponentially and that there's no significant greater shifting to Facebook from Myspace than there is of shifting from Facebook to Myspace.

Re:MyFaceYouBook (2, Informative)

Audent (35893) | more than 5 years ago | (#21106417)

Google is your friend...

http://mashable.com/2007/07/11/myspace-losing-to-facebook/ [mashable.com]

"While MySpace still holds the lead overall, Facebook has increased its number of US visitors under the age of 18 (about 2.5 times), while MySpace has dropped about 30% for the same age group"

or:

http://www.nytimes.com/2006/06/03/business/03online.html?ex=1306987200&en=50eeef6343012d1c&ei=5090&partner=rssuserland&emc=rss [nytimes.com]

"For big, slow-moving corporations, this presents a problem. When Rupert Murdoch's News Corporation acquired the community site MySpace nearly a year ago, the site was at the height of its popularity. But now there are indications that the teenagers who made MySpace cool may be moving on to other things." The whole story is worth reading as well...

And as others have said, Bebo, Twitter, etc are coming along as well.

Re:MyFaceYouBook (2, Informative)

Audent (35893) | more than 5 years ago | (#21106453)

and to reply to myself (stupid submit button... stupid):

http://online.wsj.com/public/article/SB116182858175204222-hQdPgEpkAYLfclS_PCCvtIVQvSo_20071025.html?mod=blogs [wsj.com]

Both MySpace and Facebook lost visitors in September, according to Nielsen/NetRatings, a Web-tracking service. The number of unique U.S. visitors at MySpace fell 4% to 47.2 million from 49.2 million in August, and the number of visitors to Facebook fell 12% to 7.8 million from 8.9 million.

Re:MyFaceYouBook (1)

Wobble-U (1112077) | more than 5 years ago | (#21106261)

Where I am, MySpace isn't even that big, almost everyone I know has a Bebo account

Re:MyFaceYouBook (1)

Breakfast Pants (323698) | more than 5 years ago | (#21106423)

Every one said the myspace buyout was *crazy* that there was no way they were worth 1 billion; shortly after the buyout, they signed an ad deal for exactly 1 billion.

Re:MyFaceYouBook (2, Interesting)

insertwackynamehere (891357) | more than 5 years ago | (#21106505)

MySpace and Facebook have always attracted different crowds. At this point many people have both, but there is one that is what they use all the time and one that is pretty much dead. But there isn't evidence that MySpace is dying, it's just that Facebook has taken the spotlight as being the next big thing. People aren't still talking about Google's search engine capabilities like its 1998 but Google as a search engine is doing just fine, and possibly even gaining users still. Google the company is also excelling and whenever something new comes out from Google, it gets press. Right now stuff is coming out about Facebook and they're getting press. Myspace is no doubt going to get some kind of press with the next 2 months at the MOST. But none of these sites are dying, press time or not. There is a Web 2.0 bubble, but it is spurred by sites like Last.fm, Facebook, and Myspace. The first web bubble was fueled by Google, Yahoo, Amazon etc. So when you say the bubble will burst and these sites will be worthless, you are misunderstanding history; the large, popular websites survive the bubble and become staples of the web and the 100s of pointless tag-along sites that try to jump on the wagon at the last minute, have no users and get tons of stupid investors are the ones that go under.

In short, the Web 2.0 bubble will burst and just like the Web 1.0 bubble, all of the tag-along crap will be purged and the big-players will survive for an indefinite amount of time. I don't see companies like Amazon, Ebay and Google going under any time soon (and I mean I can see them lasting for decades, even into the 2100s, at least as companies, much like Sears and other stores have been around since the 1800s). All the big players now, that inspire the addons have just as much potential and when the bubble bursts, their survival will only cement their longterm existance as they continue to evolve and stay in business for years.

... why? (0)

Anonymous Coward | more than 5 years ago | (#21105813)

I understand buying a company and using it to accomplish things you might want done, and I understand buying a substantial stake in a company that's going to become an important business partner... but remind me again why .016 of a company will advance your personal agenda? I mean, Yahoo and Google acted like they wanted it, so maybe it was a *really special* 2/125th part of the company, but I don't follow why this is important.

Re:... why? (2, Insightful)

MightyMartian (840721) | more than 5 years ago | (#21105929)

If I were Yahoo and Google, I'd probably be hunting out these overpriced businesses, making it look like I was oh-so-interested, and then "losing" to Microsoft, wasting its time and resources on meaningless acquisitions.

Re:... why? (1)

g4sy (694060) | more than 5 years ago | (#21106371)

Shhhhhhh

Re:... why? (0, Flamebait)

MightyMartian (840721) | more than 5 years ago | (#21106447)

Shhhhhhh


Don't worry, some worthless pile of crap moderator who just finished sticking carrots in his eyes decided to mod my post "Overrated". It's a good thing we have adolescent donkey fuckers getting mod points.

I cannot hold myself (3, Insightful)

KeepQuiet (992584) | more than 5 years ago | (#21105817)

"total site at somewhere around $15 billion."

WTF!?! Facebook is worth of 15 billion dollars? I thought paying more than a billion for Youtube was dumb.

Nah, it's worth more. (1)

aliquis (678370) | more than 5 years ago | (#21106161)

Afaik Yahoo and Google or whatever had offered 60 billion if I remember correctly, atleast I think someone did.

They didn't took it thought and from that article I got the impression they wanted to have it valued in the range of 100 billion instead.

So the price Microsoft is paying is very low and very cheap. I wonder why they got it at all for that amount of money, guess they wanted some cash without giving away the whole company.

Re:Nah, it's worth more. (1)

rjcarr (1002407) | more than 5 years ago | (#21106413)

Zuckerman turned down some money to yahoo (only after accepting their first offer), but nowhere close to your claim. I think it was either 2 or 4 billion. It might have been *only* 1 billion, but it wasn't more than 5.

Re:Nah, it's worth more. (1)

aliquis (678370) | more than 5 years ago | (#21106531)

K, I stand corrected in that case then.

http://bub.blicio.us/?p=364 [blicio.us]
http://www.vinnylingham.com/why-is-facebook-worth-10bn.html [vinnylingham.com]

Seems like you are correct, and then it was a good price. I still wonder where I got the numbers from thought, but I were afraid that they were wrong in the first place.
Sorry for fooling people then :)

Re:Nah, it's worth more. (1)

larry bagina (561269) | more than 5 years ago | (#21106449)

No offense, but your memory sucks. In 2006, Facebook turned down a $750 million offer and wanted $2 billion.

It was from a Swedish article and in SEK not US $ (2, Informative)

aliquis (678370) | more than 5 years ago | (#21106627)

Maybe it's just due to inflation or the dollar value ;)

Thought 750 or 900 million or whatever probably WAS 6 billion SEK, so I might have close to read it.

http://www.e24.se/dynamiskt/reklam_media/did_17328904.asp [e24.se]

Is probably what I had read, it says Yahoo offered 7 billion SEK september 2006 and Google 15 billion SEK one month later.
Zuckerman said no and that 56 billion where more close to the correct value (close to 60 billion so that explains where I got it from.)
It also mentions Yahoo tried again this year in may for 11.2 billion SEK, and that Microsoft wanted to buy 3-5% for 2-3.2 billion SEK which would value the company at 65 billion (still close to what I said.)
And finally it says that he seems to wait until the value is raised to 100 billion SEK.

So ok, it wasn't offers from Yahoo or Google which where close to 60 billion SEK NOT DOLLAR but Microsofts offer instead.
And 100 billion SEK value wasn't US dollar either.

Re:I cannot hold myself (1)

Loether (769074) | more than 5 years ago | (#21106249)

If I was facebook I'd accept Google's offer as well. It'd be a funny headline "google and microsoft now own 1.6% of facebook each". Google paid half price and still well more than it was worth. Now that would be a great day for facebook. One thing the first dotcom bubble should have taught us all, Take the money while the money is good.

Re:I cannot hold myself (1, Informative)

rhizome (115711) | more than 5 years ago | (#21106299)

WTF!?! Facebook is worth of 15 billion dollars? I thought paying more than a billion for Youtube was dumb.

Read it again. The only number in the entire story that is not invented out of thin air is "$240million."

adblock won't kill this plan... (1)

clubhi (1086577) | more than 5 years ago | (#21105863)

adblock won't kill facebook. if anything facebook has the advantage. they can store ads locally, obfuscating the manner in which they appear. paying people to verify your ads show up on a plethora of other sites can be costly...

Facebook??? Thats funny. (0, Offtopic)

jskline (301574) | more than 5 years ago | (#21105893)

That really is funny. I just added facebook.com to the url content filtering block list on my network. I look to keep my kids safe and keep the perverts away....

Re:Facebook??? Thats funny. (0, Flamebait)

Anonymous Coward | more than 5 years ago | (#21105949)

I look to keep my kids safe and keep the perverts away...

You must be one of those stupid americans I hear so much about. Move along - nothing to care about in that country.

Re:Facebook??? Thats funny. (1)

MightyMartian (840721) | more than 5 years ago | (#21105977)

That really is funny. I just added facebook.com to the url content filtering block list on my network. I look to keep my kids safe and keep the perverts away....


Heard moments ago in Redmond, WA: "I'm going to fucking kill content blocking..."

Re:Facebook??? Thats funny. (1)

jskline (301574) | more than 5 years ago | (#21106497)

Yea; and the picture I have in my head is of Mr. Ballmer himself stooped over in complete anger with steam emanating from his ears as he says that.

Re:Facebook??? Thats funny. (2)

Derek Loev (1050412) | more than 5 years ago | (#21106535)

When your kids are in college (Yes, I know they allow High School now, and maybe even younger) I'm pretty sure your adblock isn't going to reach all the way to the college campus. I suggest teaching responsible computing, not taking the same path the schools are (Blocking everything they don't understand: EX, Wikipedia).

Re:Facebook??? Thats funny. (1)

Kalriath (849904) | more than 5 years ago | (#21106569)

I also block it at home too, along with Bebo and Myspace. Not because of perverts or anything though, just that bandwidth is too expensive for me to allow people to chew up gigs of it in a month browsing it. At work we block it for obvious reasons.

By "a stake in Facebook", do you mean (2, Funny)

Dachannien (617929) | more than 5 years ago | (#21105915)

...the wooden vampire-impaling kind of stake? Because if so, I think Microsoft's got it all backwards.

Makes this guy a visionary (1)

Anonymous Coward | more than 5 years ago | (#21105951)

http://slashdot.org/article.pl?sid=06/10/16/0015203 [slashdot.org]
"A few weeks ago I wrote an open letter to my former friend from school, Facebook founder Mark Zuckerberg, telling him to take Yahoo's money before it's too late."

http://www.aarongreenspan.com/letter/index.html [aarongreenspan.com] - hire this dude, he's a visionary

Business as usual. (1)

siyavash (677724) | more than 5 years ago | (#21105957)

Free market and competing corps. Where is the news?

Slogan suggestions (1)

Anonymous Coward | more than 5 years ago | (#21105959)

Facebook, now with 1.6% fail!

Facebook, Bill Gates is your friend.

Facebook, following vista all the way down.

Facebook, overruling a minority shareholder and using ads from a company that doesn't suck ass.

Is the interface really any good? (5, Funny)

Anonymous Coward | more than 5 years ago | (#21105961)

The past couple of days, I've been listening to my co-worker talk about hitting the wrong button and 'hugging' a large group of people. Not only is he freaking out that only the men have returned his 'hug', he is trying to figure out how tell these people that he did not mean it without alienating them.

Who needs soap operas?

Which one is it... (0)

Anonymous Coward | more than 5 years ago | (#21106007)

Microsoft buying stake in a company makes that company look mediocre

OR

Microsoft always buys stake in mediocre companies (left overs from Google buy outs)?

I'd thought this had already happened (3, Funny)

2ms (232331) | more than 5 years ago | (#21106009)

Based on the giant upgrade to IE7 suggestion that started popping up every time you log in, I'd thought this had already happened.

Re:I'd thought this had already happened (2, Informative)

Joe the Lesser (533425) | more than 5 years ago | (#21106163)

Um, what are you talking about? Can you link to a photo? I log in daily in firefox and haven't seen anything.

$15 billion in 3 years? (1)

The_Crowder (946902) | more than 5 years ago | (#21106075)

I'm curious if any other companies have experienced this kind of growth. Does anyone have any examples?

Re:$15 billion in 3 years? (3, Funny)

MightyMartian (840721) | more than 5 years ago | (#21106221)

I'm curious if any other companies have experienced this kind of growth. Does anyone have any examples?


Enron... WorldCom... Kozmo.com...

Re:$15 billion in 3 years? (1)

larry bagina (561269) | more than 5 years ago | (#21106537)

on IPO day, VA Linux had an intra-day market cap of 21 billion.

Nothing new from MS (0, Troll)

necro2607 (771790) | more than 5 years ago | (#21106093)

What, Microsoft matching or attempting to block the plans of competitors? Nothing new from them, that's for sure!

Still never been to Facebook. (0, Troll)

Jack9 (11421) | more than 5 years ago | (#21106111)

I've said this before. No reason to go there. Never been, never will (unless I come across a link which I click and I end up there).
This "investment" is ridiculous, so I'll start with the appropriate ridicule...

Microsoft again shows that it is composed of ignorant idiots.

Re:Still never been to Facebook. (1)

insertwackynamehere (891357) | more than 5 years ago | (#21106593)

Facebook isn't concerned with you then, just like you aren't concerned with Facebook. Facebook is concerned with the millions of other users who do have a reason to go there.

A modest proposal. (4, Funny)

IgnoramusMaximus (692000) | more than 5 years ago | (#21106113)

I have a plan.

Seeing this level of wisdom, after painstaking, conservative estimates of revenues and dividends were calculated to come up with this value of $15 billion, which would in the "quaint, old-fashioned" world of people who actually built companies to feed their families and those of their workers be requiring something like a billion of yearly revenue and something like $10 billion in assets, I came to the conclusion that we Slashdotters too can take advantage of this insanity.

Here is what we should do: Each of us starts a corporation, with names like "IgnoramusMaximus' Megacorp Consolidated on the Internet!" (that last bit is important for the "traditional" investors) and then we "sell" to each other our "stakes" in these wonders of modern enterpreneurship for, say, conservatively, 20 million US dollars (or Euros) a share, with the price being "paid" in our equally valuable shares of the other Slashdotter's corporations. If we all say our stuff is worth beeeeeelions, who is to say otherwise! After all, we got web sites and email for these corps!!!

Next thing you know, our shares can be traded on NASDAQ, NYNEX and who knows where else, as they are far in excess the required share price for those markets and I am sure we Slashdotters can create sufficient trade "volume" trading our super-shares via email 20 times a day.

All that remains is for the turkeys, known as the "institutional investors" so start biting! After all they gamble on equally reasonably "valued" and brain-dead "opportunities" such as the above mentioned FaceBook. Why should they care if we have no product, no sales, no assets? That never stopped them before, did it?! And we are on the Internet!

And so dear Slashdotters, I am hereby giving you your way to beeeeeelions of dollars (or euros) as easy as filling some paperwork and registering the name!

So here it goes:

  • 1. Set up a useless Internet corporation
  • 2. Do a home-made "IPO" (complete with all the "buyer-beware" prospectuses as required by the FTC) and trade its shares for shares of other useless corporations, claiming per-share value in tens of millions (by mutual agreement).
  • 3. Create sufficient volume of trades with many, many Slashdot users thus fullfilling "serious" exchange listing requirements.
  • 4a. Get listed on NASDAQ
  • 4b. Claim your net worth is into billions if you need an actual money loan from a bank for anyting (and you will be right, according to the silly Wall Street definitions)
  • 4c. Wait for gamblers, otherwise known as "investors" to show up and start trading your make-believe corp (and they would not be able to tell a difference from a "real" one anyways). No danger of you getting accused of "inside trading" or "pump and dump" because you, on your corporation's website boldly state that "This company does Dick All, Bupkis and sometimes Didley Squat!" (in small print at the bottom)
  • 5. Profit!!

Re:A modest proposal. (2, Interesting)

insertwackynamehere (891357) | more than 5 years ago | (#21106643)

Your problem is in step 1. 1999 called, they want their business model back. You see, Facebook is worth 15 billion because investors acknowledge that it is. Money _isn't_ real anymore. Everything is based on faith and trust in the handlers of the money, whether it be the bank, the government or the company. There is no backing of silver or gold to money any more, only trust, and Microsoft, a big player, trusts that Facebook is worth 15 billion and that's all that matters. A pointless company that can't back up it's existance is not worth 15 billion to Microsoft. So yeah, your idea might work until the second web bubble bursts and the tons of sites following your plan already will experience the pitfall of ebusiness when there is actually no business after all.

The future of social networking? (2, Interesting)

IgLou (732042) | more than 5 years ago | (#21106119)

I'll admit up front I'm not one of these technology pundits that make endless speculation but something occurs to me. In the big picture doesn't the future of social networking truly depend on the interopability of these social networks? And if so, wouldn't the player that steps up and comes up with a method to bring interop between social networks and then effectively control that method (heck they don't even have to make it proprietary just control the protocol) will be the one you want a stake in if you're yahoo/google/ms?

I'm on Facebook, I enjoy it but it's clear to me it's not worth $15 billion. As others have said the "next big thing" will come along and draw people away again. I can already see how facebook is going the way of MySpace, sadly with the number of applications that people clutter their profile with (myself included!). Then when everyone rushes off facebook then what's facebook worth? Hardly 15 Billion but the market seems to responded positively to this announcement and Microsofts stock price has done well today (because they beat google).

My point is that I believe the real stake will be the provider that brings people the ability to use the service that they want and still make their connections. Otherwise people are blowing their money on things that have no real value due to user flux.

Re:The future of social networking? (2, Insightful)

0xdeadbeef (28836) | more than 5 years ago | (#21106405)

In the big picture doesn't the future of social networking truly depend on the interopability of these social networks?

Exactly. Facebook answers two questions: what are my friends up to and who else do they know? How is that not better done with other technology? Who wants to lock into one company's platform to manage their social life?

Anyone remember Friendster? Yeah, it collapsed under the weight of its users, but long before that it stopped being interesting. Orkut had the hardware and was easier to use and its discussion group features brought something new to the table, but it never went anywhere, either.

It took "gen Y", with it's comfort with the Internet coupled with a lack of sophistication regarding it, to turn Facebook and MySpace into something enduring and popular. But they're still going to get bored with it. These things are toys, and they always will be until they can become as simple and ubiquitous as email or text messaging.

At least LinkedIn, with its focus on career networking, is actually useful for grown-ups. That *might* have a future, if they can get past the creepy spammer vibe to the whole thing.

What's 1.6% of nothing? (2, Insightful)

sqrt(2) (786011) | more than 5 years ago | (#21106175)

Just because you have a large user base does not mean you have a large source of income. I don't know if Facebook is profitable, but I do have my suspicions that it is grossly over-valued right now. This social networking craze reminds me of a little thing that happened a few years ago. Eventually these companies are going to have to find a way to make money...ads? That's the best idea they've been able to come up with. Eventually though, someone has to buy something for that model to work, and when your user base is a group of people that signed up for a service because it was free don't be surprised when they're not so eager to pull out their credit cards (If they even have them, since, surprise MS, your users are also a bunch of high school students!). The only thing I can think of is maybe MS thinks there is some value in the data, even that I'd say is nebulous at best. This screams of "me-too!" corporate positioning. MS can obviously afford this, they probably weighed the chances of being left out of the social networking fad and losing money on this deal and considered it an acceptable risk. The only major effect it could have would be positive, obviously they can afford it.

*Sniff* ... *Sob* (2, Insightful)

Qbertino (265505) | more than 5 years ago | (#21106195)

I'm sitting here in my mid-30s, webdeving against abysmal insignificance since 2000 and along comes some highschool punk and cashes 250 MILLLION DOLLARS for a website totalling a nominal 15 billion in worth. Un-f*cking-believable.

Karma can be tough.

Goes to show a main business rule:
Not what *you* think is a cool interweb app is a cool interweb app. If you can think the concept 'cool interweb app' you are most likely more intelligent than 99% of the poplulation and what you think matters zilch against any possible demografic. What your *customers* think, on the other hand, is *all* that matters in business. Be they 250 Quadzillion Facebook users or a board of half-a-dozen ... *GASP!* ... *SOB* .... MS Execs with truckloads of cash to burn.

Re:*Sniff* ... *Sob* (1)

MightyMartian (840721) | more than 5 years ago | (#21106319)

The trick here is being able to predict what the aimless, mind-numbingly stupid consumer will use for the next fifteen seconds, and selling it before the dipshits with the money figure out that it wasn't anything at all. Oh yes, and taking that payment in cash, and not in some soon-to-be worthless stocks, because as paper goes, they're really not that comfortable to wipe your ass with.

/. could be worth billions!! (0, Offtopic)

uniquename72 (1169497) | more than 5 years ago | (#21106227)

...if only they'd let us upload dozens of half-nude pics of ourselves on our profiles page.

240M for 1.6% of Facebook - Back to boom time (1)

kde_rocks (868343) | more than 5 years ago | (#21106239)

Here is my opinion on this deal reproduced from this blog [dynalias.com] . I don't understand it. Are we back to late 90s? This type of valuation is a signal of late 90s valuation which cannot be justified PERIOD. We first had E-Bay acquiring Skype @ ridiculous valuation and then righting it off. Most likely Microsoft will write off this investment in a few months as well. Given the cash position of the MSFT, this will have little impact on their bottom line. But this completely distorts the market space for near future acquisition and startup activity. The VC money flow starts diverting on ".com" and starts drying off from infrastructure where such valuations are still not there. I loved late 90s. Lots of people made a lot of money. But I was just too young at that time. May be if MSFT/Yahoo/Google keep fighting, I will be able to make some money in late '00s :)

All According To Plan (1)

meehawl (73285) | more than 5 years ago | (#21106323)

this completely distorts the market space for near future acquisition and startup activity.

Exactly! This pretty trivial investment (for MS) raises the cash barrier to entry for new startups and makes it several times more expensive for companies like Google/Yahoo/Ebay/Sun/Apple to buy new technolgies. MS isn't that concerned about crazy runups in Web2 bubble valuations because it's got its extraordinarily profitable Office business just ticking along.

$350 Mill is PR Number (3, Informative)

mpapet (761907) | more than 5 years ago | (#21106283)

What usually happens is there is a little cash over the table with some other promised cash materializing if the project hits some agreed-upon benchmarks.

Let's say they actually make $150 million this year, since the company is fishing for investors, they are burning through whatever they are making.

Today's lesson: Company seeks investor == Can't grow on it's own capital =~ disfunctional business model.

It will be interesting to watch the flame-out in a couple of years.

I don't really think Google cares (2, Insightful)

Derek Loev (1050412) | more than 5 years ago | (#21106565)

Google has shown that they are willing to do what they have to do to get users to put as much of their lives on Google as possible. People are talking about how everybody left Myspace six months ago and will leave Facebook in six months too, it seems pretty likely that Google could be the new "Facebook" if they really wanted to.

control (1, Redundant)

hey (83763) | more than 5 years ago | (#21106607)

Now they are share holder that have some control. That's what they are after.

Google have Orkut (1)

protomala (551662) | more than 5 years ago | (#21106665)

I really started dislyking Orkut a while ago (I am brazilian, insert jokes/trolling about it here), but the interface redesign and better photo, video and community tools just made it very good.
But I don't see how any of those community sites could be the next thing or change the internet. They are just what ICQ was once, and before what email was, a way for people to find each other and communicate. I don't see how a clear winner will emerge. Probally the market will be segmented as it is now and people will not be afraid to change from one to another social network. A system that could interact with multiple social networks, as social stream google is studying seems to me a much more interesting horse to bet int.
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