Facebook Takes the Microsoft Money And Runs.

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1. franck
   

   October 24th, 2007 at 1:35 pm

   I posted it in your board 5mn ago..tried to beat you out..
   anyways..thats ridiculous..$250M ?????? I recalled people mentionned 400M and until yesterday 1.5B !!!
   I wonder why kind of deal and valuation they got after the signatures..

2. Jon Kimball
   

   October 24th, 2007 at 1:38 pm

   Wow.

3. Morgan
   

   October 24th, 2007 at 1:39 pm

   “While Google would have been a closer fit in terms of it overall philosophy (more open than not).”

   So is Facebook more open than not? I’m not convinced Google is either, but I don’t think this point really says anything.

   “And one could argue that Google has never felt comfortable targeting ads based on private user profile data.”

   This makes no sense to me either, being a Gmail user. It seems to me they are a pioneer in targeting ads based on private user data.

4. sky
   

   October 24th, 2007 at 1:42 pm

   facebook worth $15B??? It’s valuation gone crazy again, I think.

5. magnusdopus
   

   October 24th, 2007 at 1:45 pm

   Between Aquantive, Xbox 360 and Facebook, Microsoft is on an impressive run. I predict Zuckerberg will be CEO of Microsoft within 10 years. They found their next bill gates.

   BTW : Still waiting to hear if Silverlight adoption is part of the deal.

6. sanmat
   

   October 24th, 2007 at 1:46 pm

   This brings some light to facebook value. Which choice was good, too early to predict. This definetly will give MS a boost .

   http://blogkatt.blogspot.com/2.....ebook.html

7. Don
   

   October 24th, 2007 at 1:47 pm

   Um doesn’t Google target ads based on my e-mail content? G-mail.

8. Mark Mayhew
   

   October 24th, 2007 at 1:48 pm

   what a difference a year makes (Zuckerberg considered offers last year for $1B for ALL of Facebook).
   http://www.facebook.com/topic......amp;ref=mf

9. Metrowest MA Real Estate
   

   October 24th, 2007 at 1:52 pm

   Amazing how the tides have turned! Who would have thought that Facebook would garner so much value.

10. lee
    

    October 24th, 2007 at 1:55 pm

    Is there any research on what kind of ROI companies are seeing when advertising on social networks? Does the amount of money ultimately spent by consumers because of advertising really justify the kind of money being spent? It’s hard for me to imagine that it is so, so I’m wondering what kind of hard numbers are out there.

    I agree with Morgan on the point of using private information to serve up ads; in fact, google seem to have less qualms, not more.

11. Michigan
    

    October 24th, 2007 at 2:00 pm

    Makes Rupert’s sub $600M purchase of Myspace look all the wiser, doesn’t it?

12. FakeMA
    

    October 24th, 2007 at 2:01 pm

    This is insane…

13. Robert Einspruch
    

    October 24th, 2007 at 2:01 pm

    kind of a bummer - microsoft has the opposite of a halo (no pun intended) effect. It’s almost as cool as Rupert Murdoch sitting on your board. At least they did not sell the whole shop.

14. Alaska Miller
    

    October 24th, 2007 at 2:02 pm

    Why would Google and Facebook be a good fit? They’re direct competitors considering Facebook’s real goal is to become an independent advertising company. Also, pretty sure Google’s been reading my email, collecting my search histories, and caching my cookies from anyone with urchin installed since day 1.

15. Erick Schonfeld
    

    October 24th, 2007 at 2:03 pm

    The Gmail ads are an experiment, and even those are matched to keywords in your mail, not a user profile with your age, gender, relationship status, and stated interests.

16. techcrunchreader
    

    October 24th, 2007 at 2:05 pm

    Google had the bank account to go thru with the deal. Too bad, they could have kicked MSFT out of the picture.

    Anyway, 240 M$ for 1.6% of the company, good job Zuckerberg.

17. stephen
    

    October 24th, 2007 at 2:06 pm

    Unless facebook has persuaded other investors in at the same $15bn valuation, it’s not a real price tag at all.

    I bet Microsoft sees the tiny sum of $240m as the price of securing what it hopes will be a lucrative ad deal, not an investment in a valuable piece of equity.

    If that’s the case, then Facebook has in effect set its own valuation, at a price which I’m sure does wonders for the accounts of its VC backers.

18. jane
    

    October 24th, 2007 at 2:06 pm

    Erick, you make yet another incredibly biased, uninformed statement about Google vs. Microsoft: “And one could argue that Google has never felt comfortable targeting ads based on private user profile data…Microsoft doesn’t share those qualms.”

    No company has made more progress in the targetted ad space than Google. They *defined* it with their unabashedly creepy GMail policies. And Microsoft probably trails by years behind Google in making an ad platform robust enough to support the kinds of smart targetting that Google does.

    The comments on your infamous SkyDrive post of last week were, I thought, overly vitriolic, but now I’m starting to realize that all those commenters may have had a point.

19. franck
    

    October 24th, 2007 at 2:07 pm

    “Anyway, 240 M$ for 1.6% of the company, good job Zuckerberg.”

    You bet it is….!! loool

20. sky
    

    October 24th, 2007 at 2:15 pm

    It can only happen in USA, not in Europe.

21. gabbu
    

    October 24th, 2007 at 2:24 pm

    “Google has never felt comfortable targeting ads based on private user profile data”

    What the crap these guys are writing huh??

22. tusser
    

    October 24th, 2007 at 2:26 pm

    as long as user feels comfartable it doesnt mater.in the consumer market users can tolerate ads.

23. Sam
    

    October 24th, 2007 at 2:26 pm

    I don’t think Mark Zuckerburg can run with the money….what the hell does that mean? It’s not like he hit the lottery, Facebook had been generating 50M in 2006 and is expected to hit 200M in 2007.

    This is just an injection of cash to help expand the business faster than they can now. Because guess what, the server cost and employee salary probably costs them 180M.

24. Alaska Miller
    

    October 24th, 2007 at 2:27 pm

    Even without profiling, Google has finagled its way into being the dominant advertising provider for the Internet. If anything, “matching” keywords in my email is creepier than figuring out I’m 21 and selling me Budweisers.

    Google Analytics + Google Search History + Gmail + Gcal + Google Toolbar + Google Desktop Search > Facebook

25. muddu
    

    October 24th, 2007 at 2:28 pm

    Michael,
    TIME TO FIRE ERICK.

26. John
    

    October 24th, 2007 at 2:31 pm

    15 BILLION????
    That is insane. Another over the top valuation. Skype anyone?

27. franck
    

    October 24th, 2007 at 2:34 pm

    Mark Zuckerberg’s stake in the company is worth $3Billion as of today.

28. amador
    

    October 24th, 2007 at 2:35 pm

    time to sell everything. thanks facebook for the sell signal.

29. productfool
    

    October 24th, 2007 at 2:38 pm

    I am going to watch this closely before I write up a parody of such a deal on productfoolery.com. But you know, a parody of this deal might not look so different…

30. Erick Schonfeld
    

    October 24th, 2007 at 2:47 pm

    @22, “maybe you shoul bring yourself into te 21st century before making suck stupid comments.”

    Maybe I’ll do that when you learn how to spell.

31. Exchange3D
    

    October 24th, 2007 at 2:48 pm

    Looks like MS is so desperate get a piece of the action in social networks crowd that it is throwing money out without counting

32. Chris
    

    October 24th, 2007 at 2:48 pm

    This is just stupid. Come on $15B. Who in their right mind would want to work there starting now. You want to make minimum 2-5x return on options right? 10x surely isn’t out of the question. So you think FB is going to increase 5-10x - no freaking way. Just look at the market cap of companies that would put them on par with at a 75B-150B valuation. There’s going to have to be some very creative option discounting (of the type that will probably get them in trouble later) if they’re going to attract future talent. Of course any employee there for some amount of time made bank!

33. Shams
    

    October 24th, 2007 at 2:54 pm

    Microsoft has really won.
    $15 Billion, are you sleeping? Get a good calculator.

34. Dan Ackerman Greenberg
    

    October 24th, 2007 at 3:00 pm

    Damn, I wish I worked at Facebook.

    Dan
    http://www.ackermangreenberg.com

35. Shawn
    

    October 24th, 2007 at 3:01 pm

    Erick - do you have any data to back up that claim that Google is uncomfortable about serving up ads based on personal information and Microsoft isn’t? That’s a pretty strong statement given that Google is the only one doing anything close to that with Gmail ads (and Microsoft has no equivalent today).

    Why the anti-Microsoft spin?

36. anon
    

    October 24th, 2007 at 3:03 pm

    Regarding comment #35, does anyone know what strike price new employees will be getting now? Will it be at the $15B valuation?

37. Tom
    

    October 24th, 2007 at 3:09 pm

    Zuckerberg for President!! And I will be the Secretary of Defense

38. Jon
    

    October 24th, 2007 at 3:11 pm

    chill on the $15B valuation… $240 million is not much for msft and its a play for a tighter relationship with FB. Imagine windows tied into FB? It could happen.

    And remember the comments on the supposed $1b valuation from yahoo? People thought that was nuts. Will we look back in 5 years and laugh at thinking a $15b valuation was crazy? Who knows.

    is there a bubble ? yes. is FB one of the exceptions to the bubble… yes

39. Erick Schonfeld
    

    October 24th, 2007 at 3:14 pm

    @38, why do you take it as anti-MSFT? Maybe they are smart to target ads that way. I am not making a judgment. The fact is that MSFT does more behavioral targeting than Google, and thus is more comfortable with it. The Gmail ads, while admittedly creepy, are based on the same keyword-based algorithms as Google’s other search ads.

    Can you point to an example where Google has targeted ads based on user profile data instead of direct intent as manifested in keywords?

    It’s just a difference in approach. And arguably, MSFT’s approach is more in line with where Facebook wants to go.

40. Kikimodo
    

    October 24th, 2007 at 3:21 pm

    I smell another bubble.

    Remember Broadcast.com? In April 1999, Broadcast.com was acquired by Yahoo! for $5.7 billion in stock and became ……….figure it out yourself…

    Where is it today? Is this another pipe drain?

41. Seth
    

    October 24th, 2007 at 3:24 pm

    Facebook does not have a $15 billion value now, few people are saying that. However, with online ad revenue Facebook could easily be worth that and more. The majority of their new subscribers are expected to be from overseas and Facebook is expanding into foreign languages. Both Microsoft and Google (as well as Yahoo!) are drooling over those people for ad revenue. As far as this deal goes for Microsoft, good for them. Excellent call on the part of their Board of Directors http://www.newsvisual.com/news.....diver.html This is the kind of forward and aggresive action they need to take if they want to seriously challenge Google.

42. jane
    

    October 24th, 2007 at 3:32 pm

    Erick - the reason we take you to task is b/c the language you use naturally incites questions about your motivations. You have yet to provide any reasons whatsoever for stating that Google has discomfort about targetted ads, but then you say that Microsoft “has no qualms” about it. You choose to use pejorative rhetoric in making a grandiose, controversial statement backed by no clear evidence, & it appears that you try to excuse it all by prefacing it with the maddeningly non-committal “One could argue.” In addition to being poor editorial writing, it just seems downright dishonest.

43. TheNextBubble
    

    October 24th, 2007 at 3:32 pm

    @43 yes you are right. The same will happen to facebook and myspace when they want to use profiles of their users for advertising targeting. Think many of them will not accept that and then delete their entrys or reduce them to the minimum. You cannot make money with communites so that an sn is 15B worth because af the user number or theit growth. That doesnt say anything about the real valuation and potential in advertisements for this target groupt. But we will see. I think that doesnt work.

44. Yoni
    

    October 24th, 2007 at 3:36 pm

    Start > Run > CALC.EXE
    If techcrunch earns 240k$/month (as published), we can estimate that facbook makes 10x times more at least. =~ 2.5M$/mo –> 30M$/year [at least!]
    no economic module can predict how this income made facebook value 15B. what it looks to me is that MS vs GOOG had an “honor fight” between them on face book, and that zuckerberg or whatever his name is, is the winner.

    to sum things up, this whole social/blogging/web2 seems like a big bubble gum ready to explode any minute now. names of bubble from the first round have already been mentioned in the talkbacks, but also worth to mention ebay’s acquire of skype which now in prespective of 1.5 years later seems like a giant flop.

    Yoni,
    Israel

45. Jim
    

    October 24th, 2007 at 3:44 pm

    “And one could argue that Google has never felt comfortable targeting ads based on private user profile data…”

    Ha!

46. Chris
    

    October 24th, 2007 at 3:51 pm

    folks - can we drop the MS vs Google ad targeting thing. That’s so not what this story’s about.

    @41 “chill on the valuation”. I love it. That’s like saying, “dude, don’t worry about the math, what about the love, the feeling in it all…” Definitely $240M is nothing for MS to pay - the point is at what cost. Unfortunately for MS - it’s a panic buy situation. They gotta get in the game and were on the wrong side of the standard rules of negotiation. I don’t disagree that they had to do it - but shame on their management for it having to come to this point.

    @44 “Facebook doesn’t have a 15B valuation now” If the news is correct they most certainly and *legally* do have a $15B valuation right now. Else it would be like saying well since Google’s share price reflects X years of future growth I would like to make a bid to buy the company at 75% it’s current price/share. Uh - no.

    A fundraising is a very important financial/legal/fiduciary point in time. It sets the state for a lot of things - like stock option pricing, like up rounds, down rounds, IPO pricing, director liability if was way off and causing some sort of harm in the future, etc. To me that’s why $15B is the story here.

47. Cricketmaster
    

    October 24th, 2007 at 3:56 pm

    The Broadcast.com comparison is a useful one, and proves one point, which is that the online space, in it’s entirety, is up for grabs and will remain so with the current form of the web (and that’s a good thing).

    Which makes the $15 billion valuation highly speculative, to say the least.

48. Prashant
    

    October 24th, 2007 at 3:56 pm

    I don’t think that MSFT expects to make money on the $250MM at a $15B valuation. Internally for them it is a $250MM investment to get an exclusive advertisement deal over the next 4 years. The 2% stake is only icing on the cake. Had they announced that they have given $250MM to Facebook for a 4 year exclusive ad deal, no one would have flinched, this is cheaper than the Google/MySpace deal.

    I think it would be naive of us to think that MSFT is looking at doubling its $250MM investment. Locking in a potential ad platform on the other hand is lucrative.

    On that note, I doubt that there will be other investors, because the returns on a $15B valuation is probably none to negative

49. Kikimodo
    

    October 24th, 2007 at 3:59 pm

    He who has ear, let me hear …bubble rain is coming and this time it is going to be different …slow and longer. The users are not loyal to any social networking site. Remember Geocities?

    the next you will see maybe iphoneFaces and everyone will jump on the bandwagon. So, it is all about time. Let’s wait and see what we happen to these sites in 5 years to come.

    Also remember the some psychologists talking about the impact of virtual friendship compare to good old day “face-to-face” meeting. Again, I am not sanguine about the whole thing but I don’t think this will last 5-10 years to come.

    If I were the facebook guy, I will take the money just like Cuban did with Broadcast.com and run a sprint or marathon and don’t look back. Only a loser will pay $15B for a website that can evaporate in 5 years. That is a $3B burn rate/year.

    Instead, MSFT should invest in green technology or something meaningful with good RETURN.

    Just my 2 cents

50. Simon
    

    October 24th, 2007 at 4:00 pm

    I totally agree with Prashant’s comment.
    For MSFT, this is nothing more than spending $250 Mil so they can continue advertising. They have a warchest of over 30-40 billion dollars. This is a small drop in the bucket. After losing out to Google on earlier purchases of Doubleclick, this is a small victory with some long term consequences.

    And yes, MSFT probably bidded up to this high to ENSURE no one else will be willing to invest in a company that is valued ($15 Bil) so ridiculously high. It’s like buying a .COM at the peak in the late 90s and just waiting for it to drop.

    I’m glad as a MSFT shareholder than we got it done though. It’s a write-off, but definitely the ROI will present itself in other ways.

51. Izzy
    

    October 24th, 2007 at 4:01 pm

    I think Google played Microsoft. True this isn’t a huge sum for Microsoft but in a way it binds them to Facebook. The stake they bought isnt really enough for them to make a huge difference in Facebooks direction. If Google’s efforts to open its API are successful in gaining ground against Facebook then this is a defacto win against Microsoft. This isnt going to do much to hurt MS’s profits directly but if Google wins against facebook Microsoft’s leaders look even more lost. I really dont see the win for Google in buying a major piece of facebook. They already have the infrastructure and the know-how to compete and facebooks gains vs myspace only show that noones position in the social network game is secure.

52. Dave
    

    October 24th, 2007 at 4:07 pm

    @49 - It’s not so much a question about whether the post is about MSFT versus Google (although really, clearly the fact that some have picked up on Erick’s biases here must account for something). its about giving feedback to the writer that he should do more fact checking first before making sweeping statements.

53. Paul Robinson
    

    October 24th, 2007 at 4:15 pm

    There is no way they can justify a 1.6% buy-in at $240 million just as a means to be able to hand over $150 million more next year in ad revenue. This *is* a valuation of the company, they even talk about it as a valuation.

    The problem is, they’re talking about keeping up 200,000 user sign-ups/day to 200 million users and then hoping the bottom doesn’t fall out of online advertising.

    Sounds like a bubble of a buy to me…

54. anon
    

    October 24th, 2007 at 4:42 pm

    I’m not sure what to make of the valuation. While it does seem like an authentic valuation, the only investor is one that sees significant value beyond the mere financial return (if there even is one).

55. dweezel
    

    October 24th, 2007 at 4:49 pm

    I saw the writing on the wall five months ago, and am not surprised that the TechCrunch community just doesn’t “get it”. Do you realize what is happening here? The advertising deal is just the beginning, I give it 12-18 months before we start seeing the Microsoft Office suite getting developed for the Facebook platform.

    As time goes by, Facebook will start offering more services and products that keep the consumer within its walls and away from Google’s tentacles. Microsoft is old school with a known brand, the key to business success.

56. boinnk
    

    October 24th, 2007 at 4:56 pm

    For what its worth, Erik Schonfeld interviewed at Microsoft 13 years ago and was not offered a job… do the math

57. dweezel
    

    October 24th, 2007 at 5:01 pm

    For the record, Google is the one screwed. Keep thinking that the advertising through search business will continue forever — it won’t. There is a reason why people are leaving while their stock price is at unsustainable levels…

58. Kikimodo
    

    October 24th, 2007 at 5:02 pm

    #58, It seems to me, you are part of the valuation team

    No one in his right mind will value FB at $15B. That is billion with a B. I think people need to be taught Internet history lessons especially when you look back at past valuations and buyouts. You will see that tomorrow’s bubble will make 1999-2001 bubble look like a child’s play.

    Time is the only factor here. Already your old school is losing ground big time. We are in different era and Redmond doesn’t just get it.

59. app me
    

    October 24th, 2007 at 5:11 pm

    I grew up visionary I knew this… MS FACEBOOK

60. Alex
    

    October 24th, 2007 at 5:16 pm

    One could argue that techcrunch has been paid off by Google to attack Microsoft over targetted adverts.

61. Colin
    

    October 24th, 2007 at 5:36 pm

    Smart analysis here http://hublog.fr/2007/10/25/fa.....mart-move/
    Do you share the Google/Facebook opening war ?

62. Norman
    

    October 24th, 2007 at 5:40 pm

    Since Microsoft is the ad parnter of facebook in US, it is more reasonable to be the partner in overseas. Does facebook worth 15 billion? May be. Remember, members of face book are students of top colleges in the country. They are the future of the country.

63. chrisco
    

    October 24th, 2007 at 5:41 pm

    #58: Microsoft knows how to milk its operating system and Office cash cows… that’s it. Yawn.

64. Steve Ballmer
    

    October 24th, 2007 at 5:42 pm

    Gaggle was never going to beat us! If I spent a Billion!

    http://fakesteveballmer.blogspot.com

65. Scott
    

    October 24th, 2007 at 5:47 pm

    To #45 Jane, Word. It’s all in the subtle anti-Microsoft, pro-Google wording. Erick is trying to pull a fast one by implying a lot but not outright saying it.

    “Google would have been a closer fit”. Maybe 5 years ago. But in 2007 Google is the new “evil empire” secretly collecting a huge database about each and every one of us, and Microsoft is now playing nice. Every Internet company, every single one, can count Google as a competitor. Google is a competitor to Facebook. Microsoft is not. Microsoft is a closer fit.

    And your claim that Google has never felt comfortable targeting people based on their personal data has been disproven to death in the comments. There’s no evidence, NONE, that they in any way “feel” uncomfortable while they are targeting me with their ads based on everything they know about me.

66. Tan The Man
    

    October 24th, 2007 at 5:56 pm

    $15 billion valuation is ridiculous.

67. Jon
    

    October 24th, 2007 at 6:01 pm

    Hmmm… I guess by reading this deal that Microsoft also thinks social networking has had better days and it doesn’t want to much… why not just put 240M into it’s own Live Spaces?

    Jon

68. Wes
    

    October 24th, 2007 at 6:14 pm

    $15 billion looks like way over the top. Or maybe I am missing something.

69. Todd
    

    October 24th, 2007 at 6:49 pm

    The news is not that remarkable, however, the absolute lack of objectivity and reasonableness in your reporting has compelled me to come and comment.
    This is the dumbest thing I’ve read all day. It starts with a sensationalist headline which is not supported by the story, and the article is dripping with a bunch of opinion that is mostly wrong. Sure, Google would never do something like targeting ads based on a profile - give me a break. My opinion of TechCrunch has dropped a lot based on this senseless blather. I would have thought that “going pro” would also bring increasing professionalism. Apparently not.

70. Larry M
    

    October 24th, 2007 at 7:05 pm

    “won”
    interesting use of word.

71. anuj
    

    October 24th, 2007 at 7:26 pm

    Nothing against Microsoft but they have this tendency to pretty much f*** things up that they acquire and haven’t build themselves. Just hoping that the same thing doesn’t happen to facebook.

72. Theodore Denovan
    

    October 24th, 2007 at 7:30 pm

    “Google has never felt comfortable targeting ads based on private user profile data” - Whilst this may be true it certainly has scarcely hindered Google serving very specfiic contextually driven advertisements. (Gmail, anyone?)

73. Doron Vermaat
    

    October 24th, 2007 at 7:41 pm

    maybe zuckerberg can buy some decent shoes now instead of walking around in flip flops..

74. techcrunchie
    

    October 24th, 2007 at 7:55 pm

    @Jane and Todd (72):
    Agree wholeheartedly. Erick, WTF is wrong with you? Are you insane? Do you get paid by Google? Why the ridiculous title? Why the anti-MSFT rhetoric? You question if we have evidence that Google does target based on personal profile — on the contrary who the fuck is the writer here? Do you have any evidence before writing that Google does indeed NOT target based on personal profile??? Do they say it out explicitly — anywhere? Who the fuck cares what you feel Google “feels” about targeting, you dumbass fuck fanboy?

    What a crappy writer — Mike PLEASE if you wanna save Techcrunch have this Google’s-cock-sucking clown fired!

75. Amar
    

    October 24th, 2007 at 8:11 pm

    Erick has been contributing a lot of good stuff. The colume and the frequency of his posts is great. Haters…fuck off.

76. techcrunchie
    

    October 24th, 2007 at 8:41 pm

    @Amer(78):
    LOL! Amar’s another Google-cock-sucker? Oh wait thats for Erick, so Amar perhaps licks Google’s ass?

77. Srini Kumar
    

    October 24th, 2007 at 9:02 pm

    Fans of rock and roll will remember the bidding war between major labels that surrounded Nirvana after it sold 60,000 copies of Bleach. Setting Microsoft up in an “honor fight” against Google is an obvious winning strategy. I remember when Facebook investor Peter Thiel crowed about Facebook being worth at least $8bn at one point, to hoots of derision.

    Microsoft acquired something more precious than dollars today - and Zuckerberg cares more about valuation than cash. I am glad they have demonstrated themselves as a player in Web 2.0, partially because it means that other startups can attract their participation in future bidding wars. Good times !

    Finally, Zuckerberg’s influence may extend beyond the financial and even cultural. Let’s see the impact of Facebook, Myspace, and YouTube on next year’s elections. I wonder what Karl Marx would think…

78. Riko Kwe
    

    October 24th, 2007 at 9:16 pm

    Microsoft got Facebook and Digg… Good job… But their advertisement are mostly banner…. kinda annoying….

79. Vidmetro
    

    October 24th, 2007 at 9:19 pm

    that was a smart move on for facebook if i was them I would have sold the whole site.

    http://www.vidmetro.com

80. Sheetstache McClure
    

    October 24th, 2007 at 9:24 pm

    I am hereby announcing the Graphing Social Patterns of MS Powerpoint conference, to be held in the Taco Bell parking lot on El Camino on December 4th at 2pm.

81. PJ
    

    October 24th, 2007 at 9:40 pm

    Not really surprised. Facebook is solid, and it’s only just starting to get popular with the over-21 crowd.

82. Jon
    

    October 24th, 2007 at 9:55 pm

    #47…

    For real? Comparing tech crunch to Facebook!?! Your estimate is FB has 10x the advertising dollars as TC?

    Do me a favor, go to this Url:
    http://www.quantcast.com/traff.....p;domain4=

    Yes public analytics is not accurate but gives a rough ballpark. First off, you’re not close with your revenue figures. Facebook supposedly brought in 100m over the past year and yes 15b is a lofty valuation. Again, for all the doubters out there, if they would’ve started FB they would’ve sold 2 years ago for 100 million so lets leave it at that.

    They have smart ass people working there, they acquired a company that was developing a web based OS, they have tons of traction… they’re legit and they are a exception to the bubble.

83. aquintag
    

    October 24th, 2007 at 10:01 pm

    quick question…since when does a 1.6% shareholder have that much pull?

84. Findlay
    

    October 24th, 2007 at 10:07 pm

    As a recent Facebook convert and a dedicated Firfox user, my only hope is that Microsoft’s involvment in Facebook will not lead to a situation where one browser is “preferred” over another, such as the case with MSN sites.

85. Marc
    

    October 24th, 2007 at 10:11 pm

    World’s Most Expensive Cock Block.

86. Sipboy
    

    October 24th, 2007 at 10:13 pm

    Read between the lines! This is all about long term strategy. For MS, they get to ride the wave for primetime advertising. For FB, Zuckerburg is using leverage to position himself and his company for long term stability. They know this bubble will soon pop. MS has always had a good market capitalization strategy which is why they continue to be a force in technology. With technology ever-changing, FB will have their hands full within 4 years because it won’t take long for the competition to catch up. They know it at FB and MS knows it as well. Google likes to swallow companies. MS on the other hand is using the perfect strategy to keep a stronghold on their marketshare. By 2011, they will be primed for the next opportunity that technology will create. And the icing on the cake is that they will also have a stronger team of bright individuals to help figure it all out. Who in their right mind will pay that kind of money for such a small peice of the overall pie without some other major incentive. Advertising dollars and eyeballs are the keys. FB is the platform that has is right now. They wouldn’t have been able to make this deal with Myspace or any of the other sites because FB is where it is at right now. Why buy them, when you can create a beautiful relationship that benefits the both of you just as good. Wait and see! Read between the lines!

87. Ace
    

    October 24th, 2007 at 10:19 pm

    That valuation is BS. You’re not thinking clearly (if at all). MSFT is just buying a contract with Facebook to advertise. They also get some stock in the deal. The value of the transaction has to include BOTH parts - you can’t just lump it all into the stock. You think there’s no value to exclusive advertising on facebook?

    Is there something in the California water that prevents rational thought?

    Step one: Think. Step two: Write.

88. MJ
    

    October 24th, 2007 at 10:21 pm

    The $15 billion valuation is a 300x multiple of 2006 revenue of $50M and a 75x multiple of 2007 SUPPOSED $200M revenue. This “manufactured” valuation is a great win for Facebook investors, executives, and employees. However, where is the discussion on the true value/return from advertising on social networks like Facebook? Valuations are fleeting if there isn’t a business model to justify it. Bubble anyone?

89. Sandeep
    

    October 24th, 2007 at 10:41 pm

    Good for FB, and bad for Microsoft. they threw up $240 mil for 1.6%. MS buying FB- Gimme a break. With this valuation, MS will dig its grave if it tries to buy FB in future.

    FB will die on its own in the next few years. Reason: Look at the value that they are providing to the customers. I do not see any value at all. Atleast not that is worth $15bn. Maybe few millions but not in billions. Question: Does providing the ability to share pix and videos among college kids worth $15 bn? I dont think so.

    FB revenue: Its a game of demand and supply. With Internet exploding exponentially, do you think that the CPM rates will remain the same? There is limited supply of ad inventory and the real estate for those ads is rising exponentially. This will further put downward pressure on CPM (esp for SN websites). Also, remember…Myspace and Google are opening up their platforms. Developers who are swarming over FB will go to Myspace/Google. They are still the bigger fish in the market.

    Microsoft will struggle to get ROI on its investment. But maybe ROI is not the reason why they have invested in FB. What else could be the reason, if they cant buy it (as stated above) and they cant recover the money? Also, MSFT is no fool. Surely there is some strategy which we are not able to decipher at this moment. Or maybe this time they read it wrong. Afterall, everyone makes mistakes sometime.

90. Sam
    

    October 24th, 2007 at 10:58 pm

    @Chris - Great point on the potential difficulty in attracting future talent due to options.

    So is a Facebook profile really worth $306.12?

    http://www.leveragingideas.com.....rth-30612/

91. Marc
    

    October 24th, 2007 at 11:20 pm

    See my previous comment. This is all about MS thinking that they are depriving GOOG of FB ad oxygen. Chump change for MS and makes it too rich for anyone else to get their hands on. MS can pick up on the cheap or dump it later when it never lives up to the price. This is basically a keep off the grass sign for any other would be acquirers. FB has delusions of grandeur but needs this cash bad to keep the lights on in hopes that one day they’ll actually have some earnings.

92. Berlin
    

    October 24th, 2007 at 11:31 pm

    Given its deep ties with Microsoft, sticking with them was always the path of least resistance. And one could argue that Google has never felt comfortable targeting ads based on private user profile data, which seems to be the great promise of Facebook, ad-wise. Microsoft doesn’t share those qualms.

    stop sucking d#ck. Google’s will not hire you.

93. MJ
    

    October 25th, 2007 at 12:22 am

    @94

    I agree that this was more of a defensive strategic move by Microsoft to make Facebook’s valuation too rich for other potential suitors. $240M is a drop in the bucket for MS to prevent Google from getting their hands on Facebook. Huge win for Facebook from a cash infusion & valuation perspective but they will need to prove they are worth this valuation if the $15B number is to hold up long term.

94. Pierre Col | UbicMedia
    

    October 25th, 2007 at 12:38 am

    The totally overevaluated acquisition of Skype by Ebay - we’ve seen the huge depreciations impacting Ebay P&L recently - marked the beginnig of the 2d Internet Bubble

    This Microsoft / facebook deal does not make any sense, from a financial, marketing or techie point of view. It just confirms we are now in the heart of the bubble, in the eye of the tornado. Fasten your seat belts, you will be shaked soon!

95. Herman
    

    October 25th, 2007 at 12:55 am

    While all signs indicate the presence of a bubble, this is probably the most logical deal I’ve seen in a while.

    MySpace is a disguised Xanga - driven entirely by its audience. I give it 2 more years max.

    Facebook has evolved into a platform of its own, for its customers, third party developers, and advertisers. It deserves every cent of the 15 billion it’s valued at.

96. Herman
    

    October 25th, 2007 at 12:58 am

    Also, to the people who believe facebook is an impulse investment: I’ve been a facebook user since its early days. Time and time again, I’ve been impressed by how they rolled out new features and engaged with their customers. People don’t realize that facebook has changed the way with which we share and manage information.

97. aMmadz
    

    October 25th, 2007 at 2:41 am

    I always knew this day is not too far away.. But why Microsoft.. That’s definitely a wrong swing it is - Why not Google?

98. Adam Martin
    

    October 25th, 2007 at 2:56 am

    Eek Facesoft is watching you. All this talk of contextual ads based on my social stream is Minority Report creepy, so I’m talking about Paris Hilton’s recent morale boosting visit to Baghdad and an ad for The Hilton Hotel, Tikrit pops up, boy that $9 as much as you can eat, suite and hooker deal sure looks tempting… er no.

    Facesoft is watching you and when did we all think we could get everything for free? How about we all paid $1 per week for Facebook, so that’s $1 x 40 million per week, a tidy income… I vent my spleen and discuss my dreams being interpreted by a virtual psychotherapist serving my real life pop-up ads for lady shavers over at Fat Man.

    Adam

99. Adam Martin
    

    October 25th, 2007 at 2:57 am

    Sorry that should be ’serving me’ not, ’serving my’ which just sounds weird.

100. micfo.com
     

     October 25th, 2007 at 3:31 am

     Yep, user trust is the base of their success, I hope facebook deserve for that much value.