Microsoft CEO Steve Ballmer’s recent characterization of the Facebook social networking site as “faddish” apparently isn’t keeping him from reaching for his wallet in what is rumored to be a bidding battle with Google for a small but expensive piece of the fad.
Google is threatening to once again beat rival Microsoft to the deal punch, this time in the white-hot Facebook investment sweepstakes.
Microsoft and Google are each vying to take a stake of between 5 percent and 10 percent in Mark Zuckerberg’s social-networking site, with a deal expected to be announced in the next 24 to 48 hours, according to three sources familiar with the situation.
Google, in keeping with its past modus operandi, has been trying to drive the price up to a point that would scare away Microsoft. … One source said the Redmond, Wash.-based company is “willing to give any valuation possible” to keep Facebook away from Google.
The Facebook investors are looking for a $10 billion-$15 billion valuation which would mean that whichever lucky fadster gets the prize would have to come up with anywhere from $500 million to $1.5 billion to get some sort of access to the Facebook eyeballs.
I’ve previously found the purported rationales for this rumored Microsoft-Facebook deal a trifle wacky, but I guess common sense goes out the window when you are a slave to fashion. Presumably the best way to look at it is as just another eyeball auction although the the precise nature is unclear given Microsoft’s current “strategic advertising alliance” with Facebook and Facebook’s own advertising initiatives which seem just about to bear fruit.
Update: Ina Fried is reporting that sources are saying that Microsoft has won the Facebook eyeball auction. No details yet.