Business
Microsoft beats Google to Facebook stake
Microsoft beat out Google on Wednesday in a battle to invest in socializing Web site Facebook, agreeing to pay $240 million for a 1.6 percent stake in the Web phenomenon.
Microsoft also clinched exclusive rights to sell ads on Facebook outside of the United States as part of the investment that valued Facebook at $15 billion — on par with the market capitalizations of retailer Gap Inc and hotel chain Marriott International Inc.
Analysts said Microsoft paid a steep price on a bet that the three-year-old company would be able to transform itself into a hub for all sorts of Web activity.
Analysts said Microsoft paid a steep price on a bet that the three-year-old company would be able to transform itself into a hub for all sorts of Web activity.
Under the Facebook deal, Microsoft would be the exclusive third-party advertising platform for Facebook extending a previous deal for Microsoft to sell banner advertising next to Facebook member profiles in the U.S. until 2011.
Google and Microsoft, now rivals for Internet-based audiences and applications, have butted heads before for Internet properties. Google beat Microsoft with a $1.65 billion acquisition of online video sharing site YouTube last year.
Facebook, a social network that lets friends share information, allows outside developers to create games and other applications for its site.
