Rumors are swirling around the potential interest Microsoft has in investing in social networking site Facebook.com. The Wall Street journal is reporting that Microsoft is prepared to invest from $300-$500million in Facebook, and the 23 year old founder Mark Zuckerberg is saying that a %5 stake in the company is worth at least $500 million placing the current total value of the company at a whopping $15billion!
Well it looks as if Facebook investor Peter Thiel knew what he was talking about when he stated that a $1billion offer for the company was laughable, and compared Facebook’s value to that of MTV (which we by the way thought he had to be on some new form of crack to make that statement, but I guess we were wrong) which is about $7 or $8 billion.
Microsoft realizes that it’s strong hold on software isn’t enough to keep up with the lightning speed evolution taking place on the internet with social networking sites such as Myspace, and YouTube.
Zuckerberg made some strong comments against Myspace saying that they sold out for too low a price at $580 million to Rupert Murdoch’s News Corp. A few months later Google scooped up YouTube for $1.65billion which made the Myspace purchase look like crack head prices.
Zuckerberg may be smart after all by playing the “I do not want to sell” card, all the while raising the value of his social networking company.