Microsoft gives up on acquiring Facebook, offers investment instead
Microsoft is wooing Facebook yet again. This time Microsoft seeks to invest in Facebook rather than buying it outright.
If Microsoft and Facebook reach an agreement, up for grabs is a 5% stake in Facebook, estimated to be worth $300-$500 million. The amount would be enough for Facebook to carry on with its acquisition, investment and development plans.
Although neither of the two companies has issued official statements regarding the possible deal, analysts say that it is very likely that they will reach agreement. This is due to the fact that Microsoft and Facebook have an ongoing deal whereby Microsoft currently serves ads on Facebook’s network.
Microsoft has previously expressed interest in buying Facebook, but Facebook’s founder Mark Zuckerberg steadfastly refused. He’s keen to maintain the independence of his company and has continued to refuse buyout proposals from everyone.
This investment deal could possibly be the closest that Microsoft gets to getting some real action in the social networking space. And with major rivals Google and Yahoo sprucing up their social network visibility, Microsoft clearly is trying to make sure it doesn’t miss out.
This deal is one of Microsoft’s strategies in strengthening its advertising program. With Facebook’s huge population base, whoever gets a slice of Facebook’s advertising space will boost its advertising program. And as we all know, Microsoft is hell bent on getting a bigger slice of that advertising pie.
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