Microsoft wins search battle for Facebook

Category: Search

October 25th 07, 14:00

Microsoft has dramatically upped its portfolio with acquisition of a $240 million (£117 million) stake in Facebook.

Google had an offer rejected by Mark Zuckerberg's social network, following on from a dismissed takeover from Yahoo! last year, all of which made the stake purchase a real coup for Microsoft in the battle of the search giants.

Such has been the rate of growth at the four-year-old social networking site that Microsoft's stake only amounts to 1.6 per cent, with the overall value of Facebook placed at $15 billion (£7.3 billion).

It will however, provide the search and software firm with a platform for selling internet ads outside the US, building on the rights it already holds to provide banner advertising and links on Facebook.

Rival search engine Google holds the rights to place ads on MySpace and powers the site's search capacity, with Microsoft now following suit by taking its own slice of the social networking pie.

Some however, may feel that the price paid is too high – with the 1.6 per cent stake obtained after overall valuations of Facebook were in complete disproportion to the site's projected $30 million (£14.7 billion) profits for this year.

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