digg

Join DiggAbout

The Digg Crew wants to hear your thoughts!
Please take our short survey about Digg and potential feature ideas.

Facebook Valued at 15 BILLION Dollars; Takes $240 Million from Microsoft

gigaom.com — Microsoft (MSFT) has invested $240 million in Facebook at a valuation of $15 billion and gets the rights to sell third-party ads on the Facebook network. That’s about 2 percent stake.

show profanity settings
expand all
  • 97thfloor, on 10/25/2007, -15/+3I wander how much if any Google is going to snatch up
    • jmpeagle, on 10/26/2007, -2/+6Facebook rejected a rival offer from Google
    • bingobongony, on 10/25/2007, -1/+4That really is a dumb question. You really think that Microsoft would make a deal involving ads on the site WITHOUT it being exclusive?
    • ngsayjoe, on 10/25/2007, -2/+6Facebook chose Microsoft over Google. One reason I can see is that, Facebook thinks Google is too much of a threat as a competitor. Henceforth, would you want a competitor, who is also an investor, to sit on your board? Smart choice to choose Microsoft, as it is not a threat when it comes to web platform.
    • sockpuppets, on 10/25/2007, -0/+1Epic. Hate to comment abuse but given the founder's balls for hanging in there, ***** it. I salute you. Congrats.
  • vango, on 10/26/2007, -23/+2one of these days Facebook is just gonna go ahead and buy MSFT
    • yesimahuman, on 10/25/2007, -2/+12Oh, does your grandma use facebook? I bet she uses Windows...
      • NorthKorea, on 10/25/2007, -2/+3whoever uses it, it's time to moooove on! where 2 next?
    • bingobongony, on 10/25/2007, -1/+21Bill Gates keeps more money in his wallet than FAcebook will be worth when the bubble bursts.
    • UbIwerks, on 10/25/2007, -0/+3...and Clippy can start poking me.
      I can't wait.
  • stygiansonic, on 10/25/2007, -11/+4I bet the folks over at Yahoo! are kicking themselves over this latest development in the Facebook saga.
  • graviplana, on 10/25/2007, -0/+13I bet Yahoo! is more than happy about the investment.
  • graviplana, on 10/25/2007, -2/+7Wow.
  • markmayhew, on 10/25/2007, -14/+2Mark Zuckerberg for President!
    • nreynolds, on 10/25/2007, -3/+5That guy Mark Zuckerberg stole facebook from for President!

      EDIT: I don't hate Mark, just making a casual observation, I use facebook - it's "rad".
  • geneticlemon, on 10/26/2007, -0/+101Facebook: Where you buy .gif images for a dollar to give to other people, because apparently those forwarded emails from your grandma just aren't enough.
    • joeatuml, on 10/25/2007, -0/+2Free Gifts Application. Don't pay for them anymore. They don't donate the money to organizations anymore either.
  • whataboutdave, on 10/25/2007, -7/+2Title is misleading. They didn't get much more than a small share and the contract for ad ventures in the future. It's still Zukerberg's show.
    • jdmcadam, on 10/26/2007, -1/+9It's only misleading if you're bad at math.
    • edicius, on 10/26/2007, -0/+7Or bad at reading and understanding English. It doesn't say anywhere that Microsoft bought Facebook.
  • andrewcsayer, on 10/25/2007, -0/+20False. I do not miss Jim Halpert
  • hoppdawg, on 10/25/2007, -2/+151.6% of the company for $240mil? Sensing desperation.
  • brokenspatula, on 10/29/2007, -3/+43Facebook net income is 30million a year...
    That means MSFT paid 8x the previous years earnings and only got 1.6%
    That leaves facebook with a PE of 500...
    In comparison, Apple has a PE of 52
    • jmpeagle, on 10/26/2007, -4/+15they aren't a public company and don't report their earnings...where are you getting your numbers from?
      • brokenspatula, on 10/26/2007, -0/+13wall street journal

        http://online.wsj.com/article/SB119323518308669856 ...
        • jmpeagle, on 10/26/2007, -1/+8it actually appears to only be breaking even this year
          "Facebook, which runs a site where people set up personal Web pages, expects to break even this year, on a cash-flow basis, with revenue of $150 million, according to people familiar with the company."
        • thailand1972, on 11/01/2007, -0/+12Can someone tell me....how does a company that struggles to break even have a valuation of $15 Billion?Even if it makes $100M in profit next year, how can its value be 150 times its yearly profit?
        • JPCordero, on 10/25/2007, -0/+1Because it is growing like crazy and people who know what they are doing seem confident that social networking traffic is far from properly monetized
        • unleashedlive, on 10/25/2007, -0/+3Because the data Facebook has about everyone is a gold-mine of information for other companies and could easily be sold for that much.
    • existent, on 10/25/2007, -0/+1They also get the chance to advertise and earn revenue.
    • datastorageguy, on 10/25/2007, -0/+2Just an example (I know it isn't publicly traded) Stock with P/E of 500 = sell. It is way over priced and it's value is based almost entirely on speculation.

    • BradMW, on 10/25/2007, -0/+1Facebook is definitely worth 15B to some company. It's the single best market research tool ever. Just because the current owners haven't tapped into it's potential doesn't mean the value isn't there.
  • DadeEldron, on 10/25/2007, -0/+11man I wish I had a big bag of CASH....!
    • lateralus, on 10/25/2007, -0/+5There's a Woot-off underway right now. It's worth a try if you're going to be up anyway.
    • cnot3, on 10/25/2007, -2/+8I would spend it on booze, its a better investment than internet stock.
  • HUKI365, on 10/25/2007, -9/+1Where were you guy a month ago? Please tell me this isn't news to you?
  • icsbase, on 11/01/2007, -1/+18I'd call Facebook as internet bubble. This is why Microsoft got only 1,6% of the shares because they had to sell to someone to improve their services and the owner, 23 year old guy needed some cash. If he plans to keep Facebook on his own, a major share like now, the value will drop eventually. Microsoft paid a lot of overprice just to prevent Google from getting any of Facebook. It would have been Microsofts doom on internet advertisements.
    • bingobongony, on 10/25/2007, -0/+7But I thought Digg was such a HUGE site. And growing every day...
      And powered by Microsoft ads.
    • skyshock1, on 10/25/2007, -0/+1Did Google ever have any interest in buying shares of Facebook?
  • darnit, on 10/29/2007, -1/+61Man, I'm sick of all these web 2.0 sites where the owners make huge amounts of cash while it's the day to day users who create the real value of the property by providing content and community yet have nothing to show for their labor.

    .... oh wait.
    • known, on 10/25/2007, -1/+6Right. I have an account in facebook and what/where is my share of $15 billion.
    • stoppedcode12, on 10/25/2007, -0/+3Kinda like how banks (an institution that manages people's money) are getting rich off people who work everyday to create the real value in money?
  • cnot3, on 10/25/2007, -2/+35Whoever pays $15 billion for facebook is gonna kick themselves when they realize its just a bunch of teenagers uploading photos of each other underage drinking and talking about nothing. But idk maybe they will come up with some really cool .gifs people will actually pay a dollar for!
    • bingobongony, on 10/25/2007, -0/+5Nobody is going to pay that much for Facebook.
      • zediker, on 10/25/2007, -0/+1exactly, because facebook isnt worth anything more than 10-20 million tops... and even that is a stretch...
        • bingobongony, on 10/25/2007, -0/+1WEll, I think it is probably worht more than that. But not because of ad revenue alone. But Facebook holds a tremendous wealth of marketing potential with all the user information they have. There are obviously privacy issues, but they don't even need to deal with individual members data to be profitable.

          To be honest, I think that is why Zuckerberg is so willing to pass up on offers. Because even if hte bottom drops out, it should still be worth in the tens of millions of dollars. Enough to give him more than enough to live on. So he is basically playing with house money, in the hopes of being ridiculously rich. The last real offer would not make him a billionaire. I think he really wants to break that mark.
    • MScrip, on 10/25/2007, -2/+5> "its just a bunch of teenagers uploading photos of each other underage drinking and talking about nothing."

      True. But Facebook users check that site every day. Multiple times a day. It's got staying power. Photo sharing and messaging... all on one site. It works.
    • daridave, on 10/25/2007, -0/+1I agree, we were talking about FB this weekend (me and a bunch of friends) and we all agree that the buzz is already dead around us. Everybody's on it, that's great, but the applications are getting retarded and the fun/magic of finding people we haven't seen in 10 years or so, is gone... I'm not saying it's a "flavor of the month" kind of thing, but its main attraction is simple at best, the success story of FB is a weird one... but despite us all saying that, we keep going there, because as simple as it is, whatever it offers us...well, there's simply no one else doing it right now.
  • neocr0n, on 10/25/2007, -1/+27Facebook can't be worth 15 billion dollars surely?
    • bingobongony, on 11/01/2007, -0/+15It isn't...remember, Broadcast.com once had a valuation of almost $6 billion. Broadcast.com. Valuations are meaningless.
    • jmpeagle, on 10/26/2007, -3/+21it has about 30 million unique users meaning it values each user at around $500, which seems kind of ridiculous.
    • etnu, on 10/25/2007, -0/+5Broadcast.com actually sold for that $6bn, too. This time around it might be MS making a big stupid buying decision instead of Yahoo, but somebody probably will make that decision.

      I really don't get the facebook hype. Even if they completely dominated the social networking and widget/gadget markets, those are still tiny industries. Putting facebook's value at $15bn is saying that the company is worth about half as much as Yahoo -- a company with 15,000 employees and making a billion a year in profit.
      • hatchetj, on 10/25/2007, -1/+1facebook isn't really in the social networking/widget/gadget market, its in the advertising market. which just happens to be the same market that yahoo and google are in. and just about every other site giving stuff away you have ever seen.

        I don't get the advertising hype.... i just can't imagine that there is that many people in the world that all this advertising makes a difference...
    • vsujohn2, on 10/25/2007, -0/+7Of course its not worth that much... and don't call me surely
    • spyd3rweb, on 10/25/2007, -0/+2Its database of private info on millions of people sure is to someone.
  • henrikakselsen, on 10/25/2007, -2/+7240 million... Imagine how much candy we could have bought instead!
    • Downtime, on 10/25/2007, -0/+1Bill coulda bought ... 240 million Wendy's Junior Bacon Cheeseburgers!
    • Jholder112233, on 10/25/2007, -0/+1Don't worry, they can still afford that ;)
  • henrikakselsen, on 10/25/2007, -6/+1240 million... Imagine how much candy they could have bought instead!
  • ninefournine949, on 10/25/2007, -0/+12***** retarded..
  • diggmemphis, on 10/25/2007, -1/+12Bubble 2.0! 300 - 500 years to break-even at a $15B valuation. Microsoft is flailing. Facebook is playing pretty good poker. Problem is, someday they actually have to turn their cards over.
    • lorean, on 10/25/2007, -0/+3And leave the table with a LOT more chips than they started with.
  • edicius, on 10/25/2007, -1/+2And they don't pay me a ***** thing! Stingy assholes.
  • idc5, on 10/25/2007, -0/+1the $1 for a .gif isn't an original idea. it was on a networking site called funhi.com several years ago

    facebook makes their money off their "stealth" ads.. which is supposed to rival google's?
  • stklaw, on 10/25/2007, -0/+3And Digg is valued at how much again?
  • DenRoedeBaron, on 10/25/2007, -0/+14Completely ridiculous! So each facebook user is worth $300?
    • ivandir, on 10/25/2007, -0/+1That's right. Where is my $300 Facebook ehh?

      Web2.0 companies will fail once users realize they have total control of them. Unless the incentive to pay users arrives.
  • uker, on 10/25/2007, -7/+2I don't think facebook worth it. Is any people here use it?
  • Optimaximal, on 10/25/2007, -0/+4It may be valued at $15 Billion, but it isn't worth anywhere near as much. Bubbles burst and the next social networking site that springs up with a gimick will just take its market share and the site will disappear into obscurity.
    • MScrip, on 10/25/2007, -1/+1Maybe another site will spring up and everyone will move to it... but the concept of social networking is here to stay. Facebook is an all-in-one site, with photo sharing, messaging and stuff. Everyone who uses Facebook likes it, and enjoys its features. Once you're accustomed to Facebook, you can't live without it. I can't imagine going back to a time before Facebook.

      With the first bubble, no one wanted to order pet food from Pets.com. That concept was doomed from the start. But look at Facebook. Clearly Facebook is a successful and useful concept.
  • PS3FTW, on 10/25/2007, -0/+2wait 15 billion? wasnt myspace which all the kids at my school use, sold for a few million?
    • Awspire, on 10/25/2007, -1/+1Simply trends. Facebook has become the "elegant" way to social network, so MySpace is soon to be passe, if not already. How Myspace even caught on is beyond me. Never saw something so annoying on the web like Myspace. Their cookie cutter pages look like some bad web site from the nineties.
    • greatgospo, on 10/25/2007, -1/+0if by a 'few' you mean over 2000, then yes!
  • fliguy84, on 10/25/2007, -1/+4Bleh, I remember the time when Facebook is just about social networking among college students. And now look what it has become. A place for emos and wannabe pop/rock stars to hang out. Just another MySpace :(
    • MScrip, on 10/25/2007, -1/+4I remember when e-mail was just for scientific research and corporate communication. Now everyone has e-mail.

      Evolve.
    • triskele, on 10/25/2007, -0/+1Don't forget lazy entrepreneurs. A guy I went to high school with opened up a tattoo shop a few years back. His brother had his own IT business and was going to setup a website, which he had all but finished, and build computer kiosks for their front room. Now they have a myspace, with half the pics missing, and their front room is a gallery where they sell paintings at absurd prices. He's a great artist, but one of the laziest people I've ever met.
  • Awspire, on 10/25/2007, -1/+5How much is Facebook valued when you adjust for Ad-Block?
    • orangysb, on 10/25/2007, -0/+2I would say 99.9% of the people that use the internet do not use adblock, given that 85% of the web browser used is Internet Explorer, and only perhaps 1% of Firefox users use adblock.
      • Awspire, on 10/25/2007, -1/+2You are so out of touch my friend. Ever here of IE7 Pro for IE7? That add-on gives you ad-block better and easier to use than Firefox. Check it out.

        http://www.ie7pro.com/
      • AdamFromMyspace, on 10/25/2007, -1/+3"given that 85% of the web browser used is Internet Explorer"
        Um...... no.
        From w3schools September:
        IE7: 20.8%
        IE6: 34.9%
        Firefox: 35.4%
        and I'm betting the Firefox usage among facebookers is MUCH higher than the average grandma "surfing" the "internets".

        but anyway, your argument still stands.
  • TimCadieux, on 10/25/2007, -5/+3At the end of the day, I'm happy for the guy running Facebook, he turned down 1 million bucks last year, now, he accepts 250x that amount, for only 2% stake...are you kidding me?! FTW
  • Christbait, on 10/25/2007, -4/+11$240Million..... in jew gold?
  • Humentech, on 10/25/2007, -0/+1MySpace is running asp.net and Facebook is running PHP ? :-)
    • AdamFromMyspace, on 10/25/2007, -0/+1.cfm, isn't that ColdFusion?
  • LargeTrout, on 10/25/2007, -0/+1http://news.uk.msn.com/Article.aspx?cp-documentid= ...

    Oh the irony!
  • crackah, on 10/25/2007, -2/+4WHAT THE *****....

    What is MS thinking throwing so much cash at a site which will be gone tomorrow, and replaced by some other SOCIALr.US bs site?
    • LargeTrout, on 10/25/2007, -0/+1$200 odd million is nothing to Microsoft. It's not even a dent to Bill Gates or Steve Ballmer. They can easily make that money back from the dividends of Facebook's earnings from their advertising revenue.
  • LokitheComplex, on 10/25/2007, -1/+2It makes me feel really old to say it but I remember TheGlobe.com? I even had my main email account with them. Anyone else? Web 2.0 seems like...well...the same thing.

    Maybe Facebook is to theglobe.com what Google is to Altavista. But it could be theglobe.com

    I'm not on facebook. I turn down invites. It just seems so public. Like having a graffiti wall on the side of your house and asking people to write on it. "What could possibly go wrong?"

    But then I kind of fear that you have to accept that all your online info could be tracked down to you. At this point we learn what criminal, mad, hypocritical, monkeys we really all are.
    • Gabberwok, on 10/25/2007, -0/+1Facebook isn't great at privacy, but you can do some things to protect yourself. Personally, I only let friends see my profile, only put limited information on my profile, and don't allow people to post anything to a wall or see any pictures except the few I put up myself. You only have as much information made public as you feel comfortable with...
  • MIDO997, on 10/25/2007, -0/+0http://forex7.110mb.com
    oh
  • dexedrine, on 10/25/2007, -0/+4What ever happened to that 'old' facebook...Friendster? Is that still around? Whatever happened to Friendster will happen to facebook. It will get outgrown.
  • vamos, on 10/25/2007, -0/+11Attn Facebook Founders: Take the $15B!
  • smacksaw, on 10/25/2007, -0/+4I hope that Facebook doesn't start doing that "Stop Script/Continue" ***** on Firefox like it does Digg, who also uses Microsoft ads.

    Wait a minute...Microsoft hates Firefox. And my browser freezes loading Microsoft's ads. Hmm.

    I predict Facebook is going to start to have problems. Too bad, it was better than MySpace for that reason.
    • Rotzooi, on 10/25/2007, -0/+2If you are smart enough to use Firefox, you should be smart enough have AdBlockPlus running.
      No more ads, ever.
  • spilk, on 10/25/2007, -0/+215 billion? in monopoly money?
  • Awspire, on 10/25/2007, -0/+7Is it me, or has advertising revenues surpassed that of manufactured goods? If everyones selling, then who the hell is buying? I see a bright shining bubble floating about looking rather full.
    • ivandir, on 10/25/2007, -0/+1You are right my friend. The supply to make sales is always higher than the demand of sales. So advertisers are more greedy than buyers. This sometimes has consequences and leads to bubbles.
  • Grumps, on 10/25/2007, -0/+1Remember when Yahoo wanted to buy it for $1billion. Smart guy went for open platform and now its 15x its value.
  • Myztry, on 10/25/2007, -1/+3Since the DOJ crippled Microsoft's monopolistic protection racket, it's been flailing around like a thief with a slit throat.
    What Microsoft lacks in it's totally inability to innovate (ever), it makes up for in monetary power.
    But with all the buying in, buying out, patent thieving costs and failing products, it's got to eventually bleed out.
  • cnldelta, on 10/25/2007, -0/+2I actually clicked on a few of the facebook flyers in the last few weeks. Kinda more than the number of google ads I clicked in a year.
  • esheep932, on 10/25/2007, -0/+4i really miss the old facebook. now my scroll finger is sore from scrolling through useless lengths of crap on everyone's profile.
    • Damian91, on 10/25/2007, -1/+1I know -_-.
    • AdamFromMyspace, on 10/25/2007, -0/+2Whenever you come to one of those stupid appications, click its "title bar" thinger to minimize it. They stay minimized.
  • rcollamore, on 10/25/2007, -0/+1I hope Facebook goes public. When everyone is done buying the hype, and the hysteria reaches an all time high, I'll short it with everything I have
    • HerrEisenheim, on 10/25/2007, -0/+0I'll join you. Then we can pool all our money together and start Facebook II: The Search For More Monies.
  • tubesurfer, on 10/25/2007, -0/+1This sounds crazy to think that a website can be valued at so much. I always get so many different stats so I dont know what to think about how much its worth, or how much its valued at, so I will just keep Super Poking away...
    • Myztry, on 10/25/2007, -0/+1Web2 will be followed by Dot Com 2..... Artificial value with inconceivable break even points just don't work in the long term.
  • nevesis, on 10/25/2007, -0/+3The thing is that Facebook COULD actually be worth $15 bil... if in the right hands.

    The amount of information Facebook has collected on the vast majority of their users is invaluable to advertisers. They can offer the world's best MICRO-targeted advertising campaigns. They can monitor public opinion and reactions.

    The problems with Facebook, however, are countless:

    Facebook is a trend. Period. And eventually, unless measures are taken to permanently integrate FB into its users' everyday lives... it will fade away like AOL did. I think the point of opening their API and allowing custom apps was to give users' new content to keep them around... but it's a band-aid fix.

    More importantly, Facebook doesn't seem to be interested in nurturing new revenue streams. After .. what 4 years .. in business, they finally introduced targeted searching. But it's still macro-targeting (you can choose to advertise only to conservative females!).. not invaluable micro-targeting. They have these .gif gifts crap.. but no deal with Amazon to sell Christmas gifts to poor, lazy college kids.

    I honestly wonder if the Facebook team aren't too high on life, or whatever, to think rationally. While Google always seems to be one step ahead, Facebook did some great work upfront, but now just wanders in circles looking for the Doritos.
  • spyd3rweb, on 10/25/2007, -0/+1Facebook = Big Brother with a smile.
  • Fetching more discussions...
    Show 51 - 55 of 55 discussions
  •  

    Login or register to add a comment

    Create a new account or login to join in the conversation on Digg. You'll also be able to Digg stories to help promote things you like.


© Digg Inc. 2008 — Content posted by Digg users is dedicated to the public domain.
DIGG, DIGG IT, DUGG, DIGG THIS, Digg graphics, logos, designs, page headers, button icons, scripts, and other service names are the trademarks of Digg Inc.