In October 2007, we wrote about how Microsoft invested $240 million into Facebook for 1.6% in equity. Today that stake is worth $571.9 million after Facebook went public.
Facebook will have a ban on shares sales next week and it is rumored that Microsoft will most likely hang on to the equity rather than sell off their shares.
This comes off as surprising because Facebook’s stock has been declining rapidly since the company went public in May, but Microsoft sees the investment as a strategic one.
Microsoft has more of an interest in a partnership with Facebook in their battle against Google rather than making a solid ROI in the near-term. Microsoft’s investment back in 2007 gave Facebook a valuation of $15 billion. It also gave Microsoft exclusive ad agreements and to set up Bing as the default search engine.
Google had set up similar agreements with Mozilla Firefox, MySpace, and AOL before Microsoft made the investment in Facebook.