Microsoft Buys Stake in Facebook

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Seattle, Oct 25:  Microsoft has raced past Google in acquiring that coveted stake in social networking Web site, Facebook. In a deal sealed on Oct 24, Redmond bought a 1.6 percent stake in Facebook at a price of $240 million.

Microsoft also plans to sell Internet adverts for the Web site outside of the US. And there are plans to work together on areas other than advertising. Microsoft sources said this is a strong statement of confidence in both the partnership and Facebook.

For the software giant to have more-or-less established the current market value of Facebook at around $15 billion, it says a lot about the increasing importance of online communities such as Facebook. Not to mention Microsoft's sense of immediacy in establishing connect with such a site. And one might add that Facebook, started less than four years ago by whiz kid, Mark Zuckerberg, does not even make $200 million in annual revenues.

All that Google sources have managed to say about this development is a mild 'we have tremendous respect for them (read: Microsoft)'. All said, Microsoft has surely come a long way from losing out to Google in previous negotiations with the likes of AOL, YouTube, and DoubleClick.


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