« Intel (INTC) Stock Chart | Home | GOOG Nearing $700 »
Facebook Worth $15 Billion?
By Stock Charts | October 30, 2007
Microsoft (MSFT) acquired a 1.6% stake in Facebook last week for a stunning $240 million, which places a valuation of Facebook at $15 billion. While Microsoft’s offer may seem over the top, it could be quite profitable for Microsoft as well if it manages to establish a foothold in the emerging social networking advertising market. Google has otherwise dominated almost every other aspect of online advertising, and while Microsoft has made progress in closing the gap, this stake could be the beginning of a fruitful relationship if Facebook is able to integrate advertising without overly annoying it’s 50 million users. Some analysts have questioned Facebook’s ability to sell advertising, with projections of current annual revenue levels at $100-150 million. This $240 million should go a long way towards helping Facebook expand and establish itself as the leader in social networking sites.
Over the past year or so, Facebook has taken several measures to ensure it’s long term survivability and popularity. This includes opening Facebook up to everyone, pening up the Facebook platform to third party developers, and adding several features and improvements while maintaining a clean, easily navigable interface. Mark Zuckerberg has indicated that he would rather hold off on an IPO for at least another 2 years, so don’t hold your breath. In the mean time, it should be interesting to see how this plays out.
Play to win $50,000 and other great prizes in Wall Street Survivor's free fantasy stock exchange!
For more stock news and chart analysis, subscribe to my RSS feed, or stock newsletter:
Related Posts:
Topics: Commentary |