Microsoft and Facebook just signed a deal worth $240 million. Microsoft paid $240 million for a 1.6% equity ownership in Facebook and also received an exclusive advertisement partnership agreement until 2011. The investment gives Facebook a $15 billion valuation.
“We are pleased to take our Microsoft partnership to the next level,” stated Owen Van Natta, the Chief Revenue Officer of Facebook. “We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to nearly 50 million active users of Facebook.”
Facebook’s core user demographic are college students and professionals that see value in networking.
“Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only for our two companies, but also our collective users and advertisers,” added Kevin Johnson, the President of Platforms & Services Division at Microsoft Corporation. “We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership.”
While it is easy to talk highly of Facebook after this investment, the social network is having its share of problems too. The problem that I’m most specifically talking about is applications. A lot of undesired applications (profile add-ons) are constantly being solicited to users. If this problem continues to persist, users may begin to look elsewhere. Personally, I’ve been starting to prefer LinkedIn over Facebook.
