Microsoft and Facebook, based in Palo Alto, jointly announced Wednesday that the software giant would pay $240 million for a 1.6 percent stake in the 3-year-old company that is invading the home-page turf of such Internet giants as Google, Yahoo, AOL and Microsoft's own MSN.
Industry observers say Microsoft was willing to pay a steep premium to prevent Facebook from striking a similar agreement with Google or other suitors. While the deal does not put a formal value on the privately held company, Microsoft's investment would suggest that Facebook is worth $15 billion, twice the market capitalization of chip-maker Advanced Micro Devices.
Haven't we been down this road before? How on earth is Facebook worth $15 billion? What do the do to generate revenue? That "gift" function can't be generating that much cash. There can't be $15 billion worth of advertising on the site, can there?
Really, have we already frogotten the 1990s internet bubble? Because I still have some stock options I haven't cashed.
3 comments:
I'm still trying to figure out how Facebook is competing with those other pages? What am I missing?
Yes, that is absolutely insane. I remember well the days when businesses run out of garages sold for millions of dollars, right before folding.
I also remember when AOL traded its stock to buy Time-Warner, and then AOL quickly tanked, making the deal a tremendous bargain for them, considering Time-Warner became by far the most valuable part of AOL-Time-Warner.
here's a general comment, has anyone seen Jimmy around the law school recently?
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