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Microsoft to Pay $240 Million for Stake in Facebook
Nrbelex writes to mention The New York Times is reporting that Microsoft has beat out Google and Yahoo for a 1.6% stake in Facebook. The investment will cost Microsoft $240 million valuing the total site at somewhere around $15 billion. "The astronomical valuation for Facebook is primarily evidence that Microsoft executives believed they could not afford to lose out on the Facebook deal. Google appears to be building a dominant position in the race to serve advertisements online. Fearing it might lose control over the next generation of computer users, Microsoft has been attempting to match and in some cases block Google's plans, even if that effort is costly."
After hearing so much about mySpace I finally surfed it, set up a page and looked around. It's all rubbish. People ask to join your list of friends to spam you and the interface is clunky at best. I think such a site would be a good idea, but their implementation falls short of the mark by leagues.
Along comes Facebook, cleaner interface, perhaps better ability to keep crap from showing up in comments or messages people send you. Hopefully if you are spammed there's an actual admin who gives them the boot, though it's quick and easy to join so an abuser will likely create accounts as needed for pest purposes. When rot sets in people will leave and go to the next big site, leaving mySpace and Facebook to host an ever shrinking group willing to put up with crap.
Two hundred forty! Million! Dollars!? IIIIII'mmmmmm the CAAAAAT! Seriously this is great news for those who hold ownership in this site, they'll rake in a very considerable profit.
A feeling of having made the same mistake before: Deja Foobar
... a stake in the face, I suppose.
Let us not become the evil that we deplore.
Fearing it might lose control over the next generation of computer users, Microsoft has been attempting to match and in some cases block Google's plans, even if that effort is costly.
In other words, they didn't spend $240 million for 1.6% because Facebook is worth $15 billion. They paid $240 million because they're in the middle of a pissing match with Google.
The theory of relativity doesn't work right in Arkansas.
Can I be the first?
I'm not sure how a valuation is capable of representing a belief, but it does reflect an acknowlegement of important trends. Facebook's platform is similar to other "Web 2.0" RESTful APIs but is pretty simplistic (i.e. CanvasPages--which is basically an IFRAME, alerts, feeds, and privacy settings, etc.). Don't expect a RoR framework or anything close to Google's API.
Sigs cause cancer.
I'm sorry but this is ridiculous. MySpace was the last Next Big Thing and is losing users to FaceBook at a tremendous rate. Facebook will face the same fate and so will the next one and the next one and so on.
... it's insane.
In six months' time Facebook will be "worth" half that and in a year it'll be worth nothing.
I like social media, I think it's highly useful and may very well change the face of the internet in the same way the web changed the face of traditional media like newspapers, but this is Dot Com Bubble 2.0 as far as I can see. Crazy prices for Crazy products. Good on them for making the $$$$ but seriously
I am a leaf on the wind
"total site at somewhere around $15 billion."
WTF!?! Facebook is worth of 15 billion dollars? I thought paying more than a billion for Youtube was dumb.
...the wooden vampire-impaling kind of stake? Because if so, I think Microsoft's got it all backwards.
If I were Yahoo and Google, I'd probably be hunting out these overpriced businesses, making it look like I was oh-so-interested, and then "losing" to Microsoft, wasting its time and resources on meaningless acquisitions.
The world's burning. Moped Jesus spotted on I50. Details at 11.
The past couple of days, I've been listening to my co-worker talk about hitting the wrong button and 'hugging' a large group of people. Not only is he freaking out that only the men have returned his 'hug', he is trying to figure out how tell these people that he did not mean it without alienating them.
Who needs soap operas?
Based on the giant upgrade to IE7 suggestion that started popping up every time you log in, I'd thought this had already happened.
Some have speculated that this could be a move to drive adoption of the Silverlight plugin to compete with Adobe's flash. There is evidence that could work too. When MySpace was hacked that involved some clever javascript and a SWF, the admins pushed Flash Player 9 (which had added security) on the userbase and it's adoption rate, many have speculated, is largely due to that. One of Microsoft's biggest challenges with unseating Adobe's Flash is it's insanely high adoption. (something like 95% of computers have flash 8) and now they just bought into a userbase of 20 million "early adopters." Will it be effective? who knows. But I would be surprised if we didn't start seeing Silverlight widgets and ads on facebook.
meep
I have a plan.
Seeing this level of wisdom, after painstaking, conservative estimates of revenues and dividends were calculated to come up with this value of $15 billion, which would in the "quaint, old-fashioned" world of people who actually built companies to feed their families and those of their workers be requiring something like a billion of yearly revenue and something like $10 billion in assets, I came to the conclusion that we Slashdotters too can take advantage of this insanity.
Here is what we should do: Each of us starts a corporation, with names like "IgnoramusMaximus' Megacorp Consolidated on the Internet!" (that last bit is important for the "traditional" investors) and then we "sell" to each other our "stakes" in these wonders of modern enterpreneurship for, say, conservatively, 20 million US dollars (or Euros) a share, with the price being "paid" in our equally valuable shares of the other Slashdotter's corporations. If we all say our stuff is worth beeeeeelions, who is to say otherwise! After all, we got web sites and email for these corps!!!
Next thing you know, our shares can be traded on NASDAQ, NYNEX and who knows where else, as they are far in excess the required share price for those markets and I am sure we Slashdotters can create sufficient trade "volume" trading our super-shares via email 20 times a day.
All that remains is for the turkeys, known as the "institutional investors" so start biting! After all they gamble on equally reasonably "valued" and brain-dead "opportunities" such as the above mentioned FaceBook. Why should they care if we have no product, no sales, no assets? That never stopped them before, did it?! And we are on the Internet!
And so dear Slashdotters, I am hereby giving you your way to beeeeeelions of dollars (or euros) as easy as filling some paperwork and registering the name!
So here it goes:
I'll admit up front I'm not one of these technology pundits that make endless speculation but something occurs to me. In the big picture doesn't the future of social networking truly depend on the interopability of these social networks? And if so, wouldn't the player that steps up and comes up with a method to bring interop between social networks and then effectively control that method (heck they don't even have to make it proprietary just control the protocol) will be the one you want a stake in if you're yahoo/google/ms?
I'm on Facebook, I enjoy it but it's clear to me it's not worth $15 billion. As others have said the "next big thing" will come along and draw people away again. I can already see how facebook is going the way of MySpace, sadly with the number of applications that people clutter their profile with (myself included!). Then when everyone rushes off facebook then what's facebook worth? Hardly 15 Billion but the market seems to responded positively to this announcement and Microsofts stock price has done well today (because they beat google).
My point is that I believe the real stake will be the provider that brings people the ability to use the service that they want and still make their connections. Otherwise people are blowing their money on things that have no real value due to user flux.
Oops, how did this get here?
09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
Just because you have a large user base does not mean you have a large source of income. I don't know if Facebook is profitable, but I do have my suspicions that it is grossly over-valued right now. This social networking craze reminds me of a little thing that happened a few years ago. Eventually these companies are going to have to find a way to make money...ads? That's the best idea they've been able to come up with. Eventually though, someone has to buy something for that model to work, and when your user base is a group of people that signed up for a service because it was free don't be surprised when they're not so eager to pull out their credit cards (If they even have them, since, surprise MS, your users are also a bunch of high school students!). The only thing I can think of is maybe MS thinks there is some value in the data, even that I'd say is nebulous at best. This screams of "me-too!" corporate positioning. MS can obviously afford this, they probably weighed the chances of being left out of the social networking fad and losing money on this deal and considered it an acceptable risk. The only major effect it could have would be positive, obviously they can afford it.
If you build it, nerds will come. Soylentnews.org
I'm sitting here in my mid-30s, webdeving against abysmal insignificance since 2000 and along comes some highschool punk and cashes 250 MILLLION DOLLARS for a website totalling a nominal 15 billion in worth. Un-f*cking-believable.
... *GASP!* ... *SOB* .... MS Execs with truckloads of cash to burn.
Karma can be tough.
Goes to show a main business rule:
Not what *you* think is a cool interweb app is a cool interweb app. If you can think the concept 'cool interweb app' you are most likely more intelligent than 99% of the poplulation and what you think matters zilch against any possible demografic. What your *customers* think, on the other hand, is *all* that matters in business. Be they 250 Quadzillion Facebook users or a board of half-a-dozen
We suffer more in our imagination than in reality. - Seneca
Je ne parle pas francais.
Enron... WorldCom... Kozmo.com...
The world's burning. Moped Jesus spotted on I50. Details at 11.
Yeah, there is, but that domain is just a redirect to slashdot.org.
"16MB (fuck off, MiB fascists)" - The Mighty Buzzard
What usually happens is there is a little cash over the table with some other promised cash materializing if the project hits some agreed-upon benchmarks.
Let's say they actually make $150 million this year, since the company is fishing for investors, they are burning through whatever they are making.
Today's lesson: Company seeks investor == Can't grow on it's own capital =~ disfunctional business model.
It will be interesting to watch the flame-out in a couple of years.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
When your kids are in college (Yes, I know they allow High School now, and maybe even younger) I'm pretty sure your adblock isn't going to reach all the way to the college campus. I suggest teaching responsible computing, not taking the same path the schools are (Blocking everything they don't understand: EX, Wikipedia).
Google has shown that they are willing to do what they have to do to get users to put as much of their lives on Google as possible. People are talking about how everybody left Myspace six months ago and will leave Facebook in six months too, it seems pretty likely that Google could be the new "Facebook" if they really wanted to.
Maybe it's just due to inflation or the dollar value ;)
Thought 750 or 900 million or whatever probably WAS 6 billion SEK, so I might have close to read it.
http://www.e24.se/dynamiskt/reklam_media/did_17328904.asp
Is probably what I had read, it says Yahoo offered 7 billion SEK september 2006 and Google 15 billion SEK one month later.
Zuckerman said no and that 56 billion where more close to the correct value (close to 60 billion so that explains where I got it from.)
It also mentions Yahoo tried again this year in may for 11.2 billion SEK, and that Microsoft wanted to buy 3-5% for 2-3.2 billion SEK which would value the company at 65 billion (still close to what I said.)
And finally it says that he seems to wait until the value is raised to 100 billion SEK.
So ok, it wasn't offers from Yahoo or Google which where close to 60 billion SEK NOT DOLLAR but Microsofts offer instead.
And 100 billion SEK value wasn't US dollar either.
Facebook is a text-based RPG.
Apparently a lot of HS and college students use it now to form homework/study groups, things like that. And, of course, less wholesome things. One interesting side effect of its history is that (from what I've seen) most people are registered under their real names there (and if you want to join a college's network, you still have to use an email address or alum email from the school). So it can be much easier to find people than on other sites where people use aliases, which has various implications.
Warning: Apple/Nintendo fangirl. Likes her electronics cute & cuddly. May be rabid.
~ I am logged on, therefore I am.
I remember you; you said the same damn thing when MySpace was bought for 1 billion. Did you know that shortly after they were bought they made a 1 billion dollar advertising deal?
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WHO ATE MY BREAKFAST PANTS?
Get me an "active account" number, and you'll have something. Hell, my open personal Myspace account could be considered active, but I mainly only ever go on it to clean out the spam. Everyone I know is on Facebook already, or transitioning to it. I only have one friend whos resistant to it, and the reason is because he can't fuck up the page like Myspace allows him to. He can stay there for all I care given I can't even look at his Myspace page without wanting to scream about HTML standards.
Due to his obstinacy over Facebook he now wonders why no one ever invites him out to do stuff now which I find slightly funny XD
As a guy who has worked in web development for a long time, I can tell you from personal experience those numbers are completely untrustworthy.
An extremely prevalent pattern is for kids/teens/young adults to sign up 2-20 accounts per actual human. They enjoy the "role-play" elements in taking on new identities. At one time, a site I worked with didn't limit "accounts" by email, it was astounding how many accounts per email we had - this was a kid oriented site. I think the average was 4 and a half or something.
So, even assuming they are all human derived (which they're not, but I have no educated guess on percentage), you can safely halve that figure and then you're STILL not accounting for abandoned accounts. I have two on myspace.
There is a real move away from user account stat usage these days, thankfully. I've been mocking it as a statistical tool for years so I feel a certain vindication. More useful now are page views and time per session (this is qualitative generally, but less so than 'account number')
Congrats to MS on purchasing a share in a great product that's clearly jumped the shark. As someone mentioned, the userbase of facebook doesn't have a lot to lose by jumping ship for a better product. Facebook seems like a smarter than the average
As a developer on a very large kid-oriented site myself, I share your personal experience with the inflated metric of user accounts. However, MySpace has a very large audience by any account—certainly more than "nobody"—and that is what I was trying to illustrate.
~ I am logged on, therefore I am.
The problem with both of these sites in terms of future value, they are simply just a small microcosm of the overall world wide web, doomed to a limited existence. Cheap web serving appliances and IPv6 will be the death of both myspace and facebook.
M$ making the typical Ballmer blunder by buying into a section of the web at inflated prices as it's demise is on the horizon, well, at least to those who have at least some understanding of the changing nature of the internet, as hardware reduces in price, software becomes free and broadband bandwidth grows.
For either google or M$ to buy into facebook is an addmission of their own incompetence in managing their web portals and being unable to create their own desirable virtual community or in the case of both of those companies, to so mismanage their existing virtual communities, that they to lose to relative new comers.
You only buy competitors when you can't compete. As for web advertising dominance, expect a come from behind, old world mass media, fracturing of that business space. They have a depth of expertise, as well as extensive libraries of content. Admittedly slow to the party, which sees them currently behind, but they will leverage their existing media distribution systems to push out and marginalize what is basically just a 'search engine'(google) and an 'OS/office suite'(M$).
Did no one pay attention to how Newscorp sutlely promoted myspace by inserting references to it in their news papers, television shows, cable network and movies (the most interesting targeted ones were references to myspace in Sunday paper cartoons). As well as of course the expected advertising as news articles.
Chaos - everything, everywhere, everywhen