…Microsoft Doesn’t Care How Much Facebook is Worth
1. Microsoft can finally claim to have beaten Google at something. It’s a rarity, but certainly worth noting as the industry’s majors battle it out for long-term dominance in building out social communities and, more importantly, eyeballs. With Facebook not wanting to enter an agreement with someone they may end up having to compete with, particularly given Google’s OpenSocial platform, score one for Microsoft.
2. With this deal, Microsoft secures international advertising rights within Facebook - at least what Facebook can’t sell itself. With 60% of Facebook’s 250,000 daily new accounts coming from outside the U.S., there is a significant opportunity for Microsoft to extend its advertising services.
3. Not only does the investment add credibility to Microsoft’s adCenter and its acquisition of aQuantive, but its effect also extends beyond dollars and cents. As Gartner points out here, a significant benefit is that it provides a “foothold in the emerging ecosystem of social network-based advertising…”
4. For a company with extremely deep pockets, $240 million is just tuition into an education that is sorely needed within the Microsoft complex. As noted here, for a rounding error in its bank account, Microsoft gets an insider’s perspective into something upon which the future of its business may rest. Ballmer may be smart, but he doesn’t yet understand the new realities of social networking.
5. What’s the worst that can happen? In essence, it’s a bet on the future and it’s probably worth the gamble.
For a skeptical view of the deal, click here for Kara Swisher’s perspective and here for Paul Kedrosky’s lament that Facebook is cursed.
Update: Microsoft is already publicly defending its investment in Facebook. Check out what Steve Ballmer had to say at a conference recently in Mumbai.
