Thursday, October 25, 2007
Facebook Deal: Throwing Quarters on the Curb
Microsoft "gave" Facebook $240 million for a meager 1.6 percent interest in the company. This is a good deal for both sides for defensive reasons only.Microsoft gets the security of knowing that Facebook won't be acquired by Google anytime soon. For Microsoft, it was "How little can we spend to make sure Google stays away?" While $240 mil is a huge amount of money in most investment circles, it's the spare change that falls from Bill Gates' pocket when he reaches for the Gold Card. It's like the old days when a butcher would throw some quarters into the curb to get the kids from stop hanging out in front of his doorway. Go away and buy some gum, and don't come back!
And kudos to Facebook for getting more money than the founders probably could have conceived a few years ago when they decided that they could clone existing social network technology better than other folks. It's security to put money in the back for years to come, and they still own nearly all of the company! If someone is insane enough to pay $15 billion for the rest, it's all gravy.
Facebook is the last in the long line of overvalued properties that will likely come crashing back to reality by 2009. A hard rain is gonna rain when all of the dreams of monetizing personal pages and user-to-user communications are proven to be just that -- dreams.
Posted By John Gartner at 11:45 PM
Permanent Link: Facebook Deal: Throwing Quarters on the Curb
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