I'm The Face If You Want It

Bill Gates is joining Murdoch and Google in the battle to tap the media zeitgeist.

Only a few days after our take on the MySpace / Facebook equation (see the entry below), Microsoft is in talks to acquire a minority interest in Facebook, a transaction which could value Facebook at US$10 bil. or more.

The Wall Street Journal (WSJ) broke the news first, which will no doubt please Murdoch as will the fact that it’s free on this link*. WSJ reporters say that Facebook wants to raise about US$500 mil. to fund acquisitions as well as the expansion of its technology network and staff base and the development of an advertising platform.

Google is also likely bidding for Facebook though Microsoft perhaps needs it and wants it more and is therefore prepared to pay US$500 mil.+ for a 5% stake. Besides, armed with a cash balance of about US$25 bil., a US$500 mil. deal appears to be somewhat pea sized for the computer giant. Yahoo! backed out of the race last year because it could not handle the pricing.

The US$10 bil.+ valuation will also keep the online and SNS space happy as it underlines the growing value and pricing power of certain properties. The valuation will especially please News Corp. Murdoch acquired MySpace for US$580 mil. two years ago and the site today has 2x the UVs and daily audience of Facebook. Moreover, MySpace is already monetizing successfully through Fox Interactive Media’s revenue share deal with Google, which could generate up to US$1 bil. in annual revenues by 2010.

 * Note: Dow Jones had it free for about twenty four hours then typically went into that same old window of pay or subscribe as you go...~ 900,000 pay subscribers to WSJ.com but the base is not growing that much anymore... [Oct.3, 2007 - ...After reading this post and the one on the FT earlier today, the link's back up all access FREE]

Comments (0) | Post a Comment | Link