Microsoft Invests On The Social Future: $240MM for 1.6% of Facebook?!?

Posted: October 25, 2007 in Consolidation, Data Driven, Emerging Media, Social Media, Society & Culture, The Marketing Industry, Trends
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 Microsoft is definitely succeeding in positioning itslef in a manner equally as blurred as the lines between media and technology themselves. No different than arch-rival Google.  This move however, pegs the valuation of Facebook at over $15billion, a number that may represent the strategic value of the investment that was won in a bid against both Yahoo and Google rather than the actual value of the company. Only the next 18 – 24 months will tell.

But hey – I always love hearing about the young technology billionaire story, even it it’s not me. Mark Cuban, and the founders of YouTube come to mind. It’s wins like these that make it worthwhile for the VC’s to have portfolios full of otherwise mainly flops. You can get a great perspective from this NYTimes clip “Mark Zuckerberg, the 23-year-old Facebook founder who followed the path of Bill Gates by dropping out of Harvard to build a company, owns a 20 percent share that may now be worth as much as $3 billion. Accel Partners, the venture capital firm that invested $12.7 million in May 2005, now holds stock that could be worth $1.65 billion.”.

I remember when pundits were skeptical over the price paid by News Corp in the acquisition of MySpace, which in retrospect, with more than double the audience (albeit a slightly different beast) was an apparent bargain.

The bets are on a data driven advertising ecosystem, and if I were a VC that’s where I’d be allocating my attention and energy. With projected growth of $20+billion in the next few years, it’s the hybrid media/technology companies are are best positioned to provide consumers with the best content and experiences and advertisers with the most relevant and appropriate platforms to enagage targeted sub-segments of these consumers.  


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