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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.
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 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:
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
Facebook is a text-based RPG.
As a senior at a major university, I've been using facebook since '04, and I have to say that it's been a pretty important part of the lives of 95% of the students here and at other major universities for a long time. It's been great for keeping in contact with classmates from high school and in other schools. Since we (college students) developed have seen facebook grow and mature for a few years, it's come as sort of a shock to me that there's a debate about facebook's viability at all. I can't speak to facebook's staying power among the general public. In fact, though I use the site at least a few times per week, I only recently became aware that it was open to the general public. I can say, though, that it's played a fairly important part of our college lives. I've always just assumed that everyone would keep their accounts in order to help stay in contact with the numerous friends and acquaintances we've made over the past few years. For us (the majority of those pursuing undergraduate education in the US), it's definitely not a "fad."
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
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