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October 24, 2007

Microsoft and Google in Facebook bidding battle?

Posted by David Hunter at 2:05 PM ET.

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.

Filed under Acquisitions, Alliances, Coopetition, Facebook, Google, Microsoft

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3 Responses to “Microsoft and Google in Facebook bidding battle?”

  1. Microsoft nabs Facebook? | 901am Says:

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  2. Microsoft and Facebook Expand Their Alliance - Social Media, Search Engines, Website Marketing Says:

    [...] Beats Google Microsoft Wins Battle Microsoft and Gogole in Facebook bidding Battle Listen to an audio feed of this article or download it and listen to it later. Are you looking for marketing services such as social mediaoptimization, search engine marketing, pay per click program management or consulting, or search engine optimization services? Feel free to contact me. Bill Hartzer is a search engine marketing, social media, and website marketing consultant. Are you looking for marketing services? Let’s talk!   – Get Updates by Email. [...]

  3. Microsoft wins big bucks battle for a sliver of Facebook -- Microsoft News Tracker Says:

    [...] That would be 1.6% of Facebook which is quite a bit less than the 5-10% predicted by recent rumors, but at the highest rumored Facebook valuation of $15 billion. Microsoft’s original advertising alliance with Facebook was apparently US only although that wasn’t spelled out at the time. Predictably, there are also some features of this new deal which haven’t been revealed. [...]

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