Microsoft buys a bit of Facebook
— -- Microsoft said Wednesday it would pay $240 million for a small slice of Facebook in a deal that values the red-hot social networking website at $15 billion.
Microsoft covets the data Facebook collects about its members' tastes and preferences. Microsoft wants to sell ads based on those preferences, ads that appear when Facebook members use Windows Live services, Windows Mobile smartphones — even its Xbox Live online-gaming service, says online search expert Kevin Lee, chairman of Did-it.com.
If Microsoft succeeds, it can charge advertisers a hefty premium. "But we're still in the first inning, with regards to targeting ads that follow you around from device to device," Lee says.
Microsoft shares its Facebook ad sales with Facebook. The deal is expected to add to Microsoft's online ad revenue, which rose 21%, to $1.8 billion, in its fiscal year ending in June. During the same period, Google's ad revenue was $13.3 billion.
Zuckerberg, 23, has indicated he would like to hold off on an initial public offering for at least two more years. Microsoft's money could be used to underwrite Facebook's ambitious expansion plans.
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