Microsoft and Facebook: Mark Zukerberg gets his way

Microsoft buys stake in facebook It is confirmed, Microsoft is in, Google is out. As we mentioned yesterday, Microsoft has announced that it is investing $240 million in Facebook, at a valuation of $15 billion!

This puts the current Microsoft stake in Facebook at 1.6% which is much less than the 5% stake that Microsoft was initially considering. We had written on September 24th, that Facebook CEO Mark Zuckerberg was “pushing for a whopping 15 billion valuation” for the Facebook site. Looks like this round has gone to Mark!

So Mark Zukerberg got his $15 billion valuation for Facebook, but it is not clear if Microsoft reduced the amount that they had planned to invest in the company or whether the 15% share that they had planned on acquiring was based on a lower valuation of $1.6 B. If that were the case, then indeed, Facebook got a a very good deal.

There has been much said about Mark “Zuke” Zukerberg’s spurning of lucrative offers for Facebook, but certainly a lot of credit has to be given for the fact that he has managed to grow the company into the 5th largest Internet presence, right behind the likes of Google, Ebay, Yahoo and Amazon.

Microsoft will begin serving targeted ads to Facebook’s 20 million active users (their user base has been growing by 3% a month). While Google has been spurned by Facebook, they will probably not be sitting still for long. They already have an advertising network deal signed with MySpaces’ parent company Fox Interactive Media, to serve ads to the 100 million MySpace members. One wonders if there is are any ownership discussions in the offing….

Technorati Tags: Microsoft, Google, Facebook, Myspace, ad network, social network

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Snocap music distribution company gets ready for sale

snocap logoSnocap, the Napster-turned-legit music file sharing service, has laid off 54% of its workforce. Snocap was started in 2002 by Napster founder Shawn Fanning, as an attempt to set up a legal music distribution service that charged for music downloads (the Napster label itself was later revived as a legitimate paid music service, also). Initial attempts to move other music sharing sites into their fold as paid distribution sites for Snocap, was not met with much success.

So Snocap changed strategy and set up distribution deals with major partners such as MySpace. But the unshakable Apple and its itunes music service have made it hard for the Snocap service to grow.

Now there are rumors that Snocap is polishing itself up for sale. According to WSJ, Snocap has been courted in recent times by major companies.


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