It’s been rumored for several weeks, so may be anticlimactic, but AP is reporting that Microsoft is putting $240 million into Facebook for a 1.6 percent stake. (Local papers have versions on Web sites as well.)
There was a time when this kind of thing would have been suicidal for a young tech company. Microsoft would come on board, throw its weight around, take over projects, look at the code…then develop its own competing software. So times have really changed. Now you can view it as Microsoft simply trying to get in on an action it has no hope of branding on its own, as well as a jamming in a wedge against Google. You could certainly view this deal as a turning point in the Evil Empire stigma of Microsoft.
“Culminating weeks of negotiations, the investment announced Wednesday values Palo Alto-based Facebook at $15 billion — a stunning figure for an online hangout started in a Harvard University dorm room less than four years ago.” Well, it does and it doesn’t. No sound economic valuation based on P/E or any other existing index (revs of $100M to $150M, give me a break) would put Facebook anywhere near that. This is all on the come, an act of faith that social networking technology won’t commoditize or be usurped by some new technology. But what both Microsoft and Facebook want to do in cases like this is pump the appearance of value, so why not go along with the hype?
Don’t believe the stenographic line that Microsoft “beat out” Google, however. Google would not have let Facebook slip if it really wanted it. Similarly, though, suggestions that Google let Facebook slip because it is developing its own social-networking site are probably off base. My view is that Google has little incentive to do a social-networking site, because that would cannibalize its own advertising market. Besides, with Blogger, YouTube, Google Pages and other powerful pieces, the Google sum is greater than any SN’s parts.
Wow a tech blogging on HA.org!
Who’d ever thunk it?
So some college kid types a little code on his laptop and by the time he graduates he owns a company worth more than Boeing and a yacht bigger than the Queen Mary and … strange fucking world we live in now.
When’s the IPO?
It’s just a matter of time before someone pays Goldy $10 billion for HorsesAss.org. But, to keep that in perspective, nowadays you can’t even buy a monorail for that, and it barely buys a concrete bridge.
And you sure as hell can’t buy a war for ten billion bucks. Hell, you can’t even RENT a war for $10 billion.
I think having Paul here is going to be fun. Who does run WestWash? Gregoire? Nickles? Allan? Gates? Bezos?
When did you last see a piece of political reporting about the jolly green giant of Redmond?
Who is the mystery company planning to buy three blocks of SLU but unwilling to be named until AFTER the vote on Prop 1? (Hint: what Eastside Comany is contributing $$ to the Pro One campaign? )
Daddy gates is a Demo.. BillyGates gave $$ to GWB in 04. Steve Balmer is a .. mystery???
The lazy B has always had legislators in ITS payroll (really!). Does MS? or is state government too well controlled to NEED purchasing by Redmond?
As Google expands into this area … will there be street fights between tough nerds working for both giants? HAY .. maybe MS and Google could each buy a basketball team and they could hae there game against each other in the One World OS Stadium?
Paul ,,
what does your antenna tell us about the new occupant in SLU?