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Wednesday, October 24, 2007

Microsoft to Invest US$240 Million in Facebook

About 3-4 years ago, Mark Zuckerberg founded Facebook. He is a former member of the Harvard Class of 2006 and former Ardsley High School student. When he was a student of Harvard College, he has developed Facebook, which is a social networking site that allows people to communicate with their friends and exchange information. The initial member of Facebook was restricted only to Harvard College students.

Nowadays, he has become a billionaire, his Palo Alto-based Facebook Inc. has become a company that worth for US$15 billion for less than four years. The company has just sold a 1.6 percent stake to Microsoft Corp. for US$240 million.

According to WashingtonPost, Microsoft will sell Internet ads for Facebook as the site expands outside the United States, broadening a marketing relationship that began last year.

Zuckerberg has decided to hold off on an initial public offering of Facebook for at least two more years. In my humble opinion, Zuckerberg is on his line, he wants to compete with MySpace and attract more visitors and members before he states to sell Facebook’s shares to public. Being an advertising magnet, currently Facebook has nearly 50 million active users, who connect with friends on the site through messaging, photo-sharing and other tools that Facebook has offered.

To accomplish its mission, Facebook will add more employees next year to about 700 employees. Currently, the company employs about 300 workers with annual revenue to fall between US$100 million and US$150 million.

The Facebook felt more comfortable to work with Microsoft (the world’s largest software maker) than Google because Google has made no secret about its interest in building a more formidable social network of its own. I just told that Facebook does not want Google extremely dominates the Internet realm. Orkut, which is Google’s current social network, has had little success outside South America and India.

Microsoft is a company that nowadays puts a lot attention to online advertising. Before it, Microsoft never realizes that online advertising has become the most important huge-revenue to the Google. Google has slashed the Microsoft. During the period in June 2007, Google’s ad revenue soared 64 percent to US$13.3 billion, whereas Microsoft’s online ad revenue only US$1.84 billion.

1 comment:

MerCuRy said...

wow Just realize Facebook got related to Microsoft. Just curious how could Harvard students always produce distinction student

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