The Wall Street Journal has a piece today claiming that Microsoft are thinking of investing in FaceBook. TechMeme is buzzing with the news.
According to the WSJ article
Microsoft could purchase a stake of up to 5% in the closely held startup, at a cost in the range of $300 million to $500 million
This would value FaceBook at between $6bn and $10bn which seems high when FaceBook expects to have a profit of $30m on revenue of $150m this year, but what do I know?
I don’t suppose there is any possibility that Microsoft are trying to sucker Yahoo! or Google to jump the gun and throw a bucketload of money into FaceBook?
$6bn for Facebook, the dot-com bubble returns.
Why only 5%? That seems an awfully low percentage for Microsoft to buy in any company? Your right something doesn’t seem right in that deal.
Never having seen Facebook, (I’m from the darkages) this reeks of something more in the portfolio of Facebook than what is showing on the surface.
FYI, 5% of the rocketship still gets you into Orbit.
The reality is Microsoft probably realizes that even if they acquired Facebook they never could fold it into the company. A few hundred million gets them in the game (and possibly on a right of refusal list should aquisition talks come up) while at the same time giving Facebook a valuation that sticks them way outside of what most competitors could afford to pay… Defensive investing 🙂