Tag: nytimes

Microsoft buys 1.6% of FaceBook for $240m

The New York Times is reporting this morning that Microsoft has bought a 1.6% stake in Facebook for $240m, this values the company at $15bn.

This values Mark Zuckerberg, Facebook’s 23 year old founder at $3bn and Accel Partners, the venture capital firm that invested $12.7 million in May 2005 now owns 11 percent of Facebook stock worth a cool $1.65 billion.

The deal must be a huge relief for Microsoft after the stories circulating yesterday that Google were about to beat them to the post (pun intended!) in buying a piece of Facebook.

This is a dream deal for Facebook as they yield only 1.6% of the company and still manage to scoop $240m.

What is in it for Microsoft? Well, on the one hand, as the New York Times reports:

As part of the deal, Microsoft will sell the banner ads appearing on Facebook outside of the United States, splitting the revenue with it. Last year, Microsoft struck a deal with Facebook to run banner ads on the site in the United States through 2011.

but, probably equally importantly, Microsoft has stymied Google’s plans to own advertising rights on Facebook.

Is Facebook really worth $15bn? Who knows. A company is worth as much as a buyer is willing to pay for it. Today, for whatever reason it is worth $15bn to Microsoft. Who knows what it will be worth next week.

Microsoft needs a new strategy for its Windows platform

I have Vista installed on this laptop. I haven’t booted up Vista in weeks. Why? Because I installed Ubuntu on another partition and it is so much faster, and more secure (since Microsoft instructed me to remove Norton and then failed to get OneCare to work on this laptop).

Many others are eschewing Vista, not just because of the speed and stability issues it has but also because of the steep learning curve on moving from XP to Vista.

On the other hand Apple’s star seems to be in the ascendancy. In their financial statement released yesterday, for the quarter ended September 29th, they report:

Apple shipped 2,164,000 Macintosh® computers, representing 34 percent growth over the year-ago quarter and exceeding the previous quarterly record for Mac® shipments by 400,000. The Company sold 10,200,000 iPods during the quarter, representing 17 percent growth over the year-ago quarter. Quarterly iPhone™ sales were 1,119,000, bringing cumulative fiscal 2007 sales to 1,389,000.

“We are very pleased to have generated over $24 billion in revenue and $3.5 billion in net income in fiscal 2007,” said Steve Jobs, Apple’s CEO. “We’re looking forward to a strong December quarter as we enter the holiday season with Apple’s best products ever.”

“Apple ended the fiscal year with $15.4 billion in cash and no debt,” said Peter Oppenheimer, Apple’s CFO.

Why are Apple’s Mac sales doing so well and Vista so poorly?

At least part of the answer has to be in Apple’s strategy of releasing new versions every 12-18 months. Steve Jobs referred to this strategy in a piece in the New York Times yesterday when he said:

“I’m quite pleased with the pace of new operating systems every 12 to 18 months for the foreseeable future,” he said. “We’ve put out major releases on the average of one a year, and it’s given us the ability to polish and polish and improve and improve.”

Apple introduced OS X in 2001 and since then has brought out four newer versions (Puma, Jaguar, Panther, and Tiger) with a fifth version (Leopard – OS X 10.5) due to ship this coming Friday.

Ubuntu releases new versions on a pre-defined six monthly schedule.

Xp was also released in 2001 but the next version of Windows, Vista, didn’t ship until January 2007.

The gently, gently upgrade strategy appears to be working for Apple and Ubuntu as their uptake soars.

Microsoft needs a new strategy for its Windows platform. Its current strategy certainly isn’t working.