Microsoft buys 1.6% of Facebook for USD 240m

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Microsoft (opens in new tab) beat Google in securing a minuscule chunk of Facebook - 1.6 per cent - for USD 240 million, a couple of weeks or so after Steve Ballmer (opens in new tab), Microsoft's CEO, dismissed Facebook as a fad.

The social network, launched by Mark Zuckerberg, is now worth USD 15 bn, 25 times more than the USD 580 m (opens in new tab) price Media Mogul, Rupert Murdoch paid for Myspace.com, Facebook's archrival back in July 2005, in now what to look like the bargain of the century.

Facebook is expected to break even this year with revenues of USD 150 m although the massive price paid has sparked concerned that another Internet Bubble is on its way.

In other news, Forbes Journalist (opens in new tab), Daniel Lyons, writes that Facebook got more cash injections from two New York hedge funds, worth USD 500 m.

Microsoft's investment will be used amongst other things to boost the head count at Facebook to 700.

The Redmond Company has invested in competitors like Corel and Apple in the past and feels comfortable in a collaboration/competition scenario.

Désiré Athow
Désiré Athow

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.