Microsoft Invests in Facebook

The big story of the moment is Microsoft’s paying $240M and taking a 1.6% stake in Facebook. The WSJ states that this represents a $15 billion valuation. I don’t agree. It’s not the arithmetic I disagree with, it’s the implication that Microsoft or anyone else considers Facebook worth $15B. What the deal means is that Microsoft considers it worth almost a quarter of a billion dollars for a small slice of Facebook plus a larger slice of the advertising on Facebook.

Read/Write Richard states that Microsoft won out over Google. I think that the real winner here is Facebubble. The nature of Microsoft’s victory remains to be seen.

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