Comments on: Facebook and Microsoft

By: Andy

Andy — Mon, 29 Oct 2007 15:56:44 +0000

As someone commented earlier, Microsoft have paid $6 per Facebook user and the Facebook user base is still growing at an alarming rate. I reckon Microsoft will have some kind of access to the 42 million (and growing) profiles. As to how they’re going to get each user to part with $7. $8 or $9, …I don’t know.

One thing is for sure, if they manage it, the money will go to Microsoft and not Google. Microsoft aren’t stupid, they’ll have a strategy for getting hold of 10 bucks per user. So for me, …more than likely a good investment, but I’m not buying Microsoft shares based on it!!

By: Adam Martin (Fat Man Collective)

Adam Martin (Fat Man Collective) — Mon, 29 Oct 2007 07:51:25 +0000

Microsoft + Facebook = Facesoft is watching you! John you say 'Adsense driven not by search queries, but by personal profile.', in terms of ad deployment this is a logical next step, as for whether it's desired is a wholly different debate - the thought of a crawler reading my news feed and deploying contextual ads based on it is downright creepy. Contextual ads based on Search are different,we the user seek out the information, but when the information is interpreting our social stream, it's unwarranted and spam by another name.

In our totally ad centric economy, how about we look outside the box, charge FB users a $1 per week for the less creepy version (without ads), 40 million users, it starts to ad up, eve make the $1 compulsory. When did we come to expect everything for free and an economy, ever more fragile based on serving ads that people are increasingly blind to?

I go into more detail and touch on the concept of appvertising over at Fat Man blog, http://fat-man-collective.com/blog/

By: Adrian Mihaltianu

Adrian Mihaltianu — Sat, 27 Oct 2007 18:33:12 +0000

Well, Microsoft paid just $6 for each Facebook user, so I believe they will be at least some of the guys who will benefit from what Facebook has to offer, and that is personal profiles.
Now, the big question is how much access they’ll have to those social profiles. Investing six bucks in every Facebook user is not onerous, but this depends on what MSFT will manage to do with those profiles.
OTOH, investing $300 in every Facebook user as the $15mld valuation would request would be, err… folly.
So Microsoft did what it had to do: pay the right amount of money to get access to information, and rising the stake for anybody else. If Facebook will fail as a business model, I believe it cannot make MSFT lose money, because by that time they would already managed to make enough money out of it to make a profit. If Facebook will succeed, than MSFT will cash in.
It’s a win-win situation for MSFT, and everybody else (except Facebook) loses

By: Chris Williams

Chris Williams — Sat, 27 Oct 2007 14:11:51 +0000

Facebook apps + audience is why. Think of excel, word and powerpoint as FB apps with collaboration links. That's why MS has to play or it will lose a lot

By: Adido Web Design

Adido Web Design — Fri, 26 Oct 2007 20:45:34 +0000

Some good comments from your readers John. Is the $240m they paid or the $15b valuation too much? I'm assuming they must be getting some insight into how Facebook works and perhaps more imporantly, their users work. Sure they will get a peak at the millions of social graphs too.

So, too much? I would probably say so but MS are smart cookies so they have their reasons. I think there's an element of paying a bit over the odds to keep out your competitors. I'm sure they wouldn't want to lose out on another property to the big G, esp if they are to be taken serious as a competitor in the online marketing space which is still dominated by Adwords.

We've talked about whether Facebook will last on our website; Facebook: Fad or Future?

By: Rachel Happe

Rachel Happe — Fri, 26 Oct 2007 18:42:24 +0000

On the analyst call, while Microsoft and Facebook would not comment on data sharing they did keep coming back to enabling more relevant advertising which I can only infer means that Microsoft will get access to user data - at some level.

Microsoft got lock out, some kind of access to massive amounts of social data, and a portion of the ad revenues until 2011 from a site that is growing really fast. I think they got a bargain...and they probably don't care too much about the total Facebook valuation except to the extent that it will lock others out (given that Facebook probably wasn't interested in being bought).

Facebook and Google, as you explained, have very different ad models. Facebook is taking a bet on linking ads to users rather than on contextual content as Google does...and that enables more high margin brand advertising... if it works it could in fact be more powerful than the Google advertising solution and with a $240M shot in the arm, they've got the investment that will give them the ability to compete.

Is Facebook worth $15B...we'll see... but this deal is not really about the valuation.

By: Mark

Mark — Fri, 26 Oct 2007 17:30:11 +0000

I think that FB is clearly over-valued, to me, this deal smacks of the dotcom boom era, until I remind myself of the fact that Microsoft have stumped up the cash.

The 'typical' FB user appears to be remarkably fickle, and is often an ex-Myspace user that hasn't touched their Myspace account in a couple of months, using their FB one in preference.

I wouldn't expect Microsoft to be interested in monetising the FB users by ad means - there's insufficent revenue potential, also, there is a risk of users objecting to being beseiged by advertising, and that they would jump ship to the next big social networking 'thing' (a la Myspace)

It's got to be a technology thing.

By: Brad

Brad — Thu, 25 Oct 2007 21:54:59 +0000

So how much money do you think the founders took out? If I was mark I would have taken out a 120 million.

By: Brad

Brad — Thu, 25 Oct 2007 17:13:10 +0000

I know a little start-up in Vancouver Canada that has patented some things that will blow facebook and Google ads out of the Water. The Future is not any of these current trendy things like U-Tube or Facebook, or old tired companies like Google and microsoft – they are just the prelude to the real Consumer-driven Web revolution that is coming. What is needed is small innovative companies to create the mechanisms, methods and Means by which that revolution will be kick-started and I have seen at least one of those in Canada. Whoever owns it is going to be worth Billions ! The Best is yet to come

By: NShiell

NShiell — Thu, 25 Oct 2007 16:07:14 +0000

I for one am concerned about it;
Facebook is still a young company that represents some good innovations like their use of AJAX.

I am worried that if Microsoft gets a larger stake in Facebook they may begin to muscle in with THIER systems .NET etc...

Not that you can't do AJAX etc with the .NET platform but that good usability and new ideas rarely come from companies that have such a vast selection of products.

This is just my conjecture but I fail to see how MS can benefit the social networking world.

Am I quoting the obvious, being cynical?