I thought I would think about the “deal” a couple of days before sharing my thoughts. I will let you digest the details, but essentially, we invested $240 million to gain a small stake in Facebook (1.6 percent of the 15 billion valuation) and we would expand our current advertising partnership.
First, I think its of value to understand the “social network” experience on Facebook. I have been a Facebook user for several months, with friends and colleagues on my friends list. I have joined groups with some of them, wrote on each other’s walls, changed my status on occasion, even dared poking a friend. I have added some applications (like Pandora) as well. But, I have still not had the – “wow, this is amazing” experience, that “ah ha moment”. I am not sure I have personally experienced the value of Facebook for me. Joe Wilcox points out that at about 50 million users on Facebook, and a valuation of $15 billion, that it puts a value of each user at about $300! Really…I just don’t see how that value is extracted or realized in just connecting with friends. MySpace for $580 million now seems like a great bargain!
So, why make the investment? Is it all about advertising and eyeballs? Certainly, that is a big part of it. But could it be more than that? Could it be Facebook’s platform?
I was recently meeting with a customer that discussed the announcement with me and postulated on the possibilities between Microsoft SharePoint Server, Windows Live, and Facebook. Interesting…
week-long event that supports startups and students at the Microsoft Technology Center in Silicon Valley. You can view the progress in action at the Incubation Week Facebook site.
