Microsoft Corp. found a friend in Facebook on Wednesday, paying $240
million for a small slice of the rapidly growing social networking Web
site.The deal, for which Microsoft reportedly beat archrival Google,
expands the Redmond company’s advertising relationship with Facebook
and gives it an ownership stake in one of the hottest online properties.
But the companies were immediately questioned about the $15 billion
value that the deal places on Facebook, which puts Microsoft’s
ownership interest at 1.6 percent. Earlier reports of that figure
raised concerns about possible overvaluation of Facebook and other "Web
2.0" sites."Obviously, $15 billion is a pretty big number for Facebook," said
analyst Brad Reback of CIBC World Markets, in the first question of a
conference call in which the companies discussed the agreement. He
noted that Microsoft Chief Executive Steve Ballmer was recently quoted
commenting on the "faddish nature" of social networking Web sites. News
Just doing a little quick math. $15 billion means that each account as of October 24th is now worth $300. When you start thinking… how is Microsoft going to monetize my account to be worth more than $300 to them (because profit was obviously the motive of this deal) than you start to see why I predict Facebook will die among students the way MySpace has.
If you think that is some crazy math…
With the United States military preparing to spend $200 billion in Iraq in 2008… that works out to about $1 million per soldier. (200,000 deployed) Something tells me the soldiers aren’t getting $1 million worth of stuff.
I’m not saying we should leave Iraq or anything about the war itself. Just… that’s crazy math.
Leave a Reply