Metafluence

Microsoft wins the Facebook deal

It is less than an hour old and it’s already old new that Microsoft beat Google to the Facebook deal. Microsoft paid $240 million for a 1.6% stake in Facebook, bringing Facebook’s valuation to $15 billion.

I can understand Fox buying MySpace because Fox is a media outlet and as part of their target market spends more time online than with T.V., they need a place to shift their ad revenue. Microsoft, however, is mostly a business software company (with a few consumer product exceptions such as Zune and XBox). Microsoft is vying with IBM and Google to defend it’s marketshare in the office space as we transition into Enterprise 2.0. IMHO, Facebook is not worth $15 billion, at least not to Microsoft. I’m of the belief that Facebook was simply a stepping stone for the MySpace generation who will exit these hosted networks in favor of professional ones. Microsoft should have been looking for where that networked group will go next. Facebook, for the upcoming business professionals, is a brand tainted with embarrassing pics from college parties and now flooded with high schoolers and the general (aka pervy) public. I wonder what that sensitive group will think about this “sellout”?

Facebook is not the future for Office 2.0 and I believe that’s where Microsoft’s perceived value lied.

Update **
A contact has just informed me that Microsoft bought Facebook to lock up the ad revenue. They believe Microsoft’s plan is to buy Yahoo!, which bought Overture a while ago. This person says that Microsoft has a plan to earn $30 billion in ad revenue per year ($15 billion of that would come from the Yahoo! acquisition). I guess this is why a lot of the execs have left.