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Microsoft’s $240 million equity stake in Facebook

By Andrew Redfern @ 25th October 2007 11:08 am

Facebook and Microsoft Corp finally stopped flirting with each other and made a formal commitment; today they announced that the Microsoft will take a $240 million equity stake in Facebook’s next round of financing at a $15 billion valuation.

The agreement will see Microsoft as the exclusive third-party advertising platform partner for Facebook, and will begin to sell advertising for Facebook internationally.

“We are pleased to take our Microsoft partnership to the next level,” said Owen Van Natta, Chief Revenue Officer, Facebook.

“We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to nearly 50 million active users of Facebook.”

“Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only for our two companies, but also our collective users and advertisers,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft.

“We have partnered well over the past year and look forward to doing some exciting things together in the future.

The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership.”

Facebook continues to experience strong growth both in the U.S. and international markets; almost 60 percent of Facebook’s users are outside the U.S.

With over 200,000 new users registering each day Microsoft could not afford to let rivals Google to have a controlling interest; and the New York Times reports Google have been very interested for months. Facebook also famously turned down one billion dollar buyout offer from Yahoo in 2006

In addition Facebook also launched its “Platform for Mobile” which allows any Facebook’s developers to extend their applications to work with mobile phones.

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