Source: Microsoft wins Facebook bid battle | Hacker News Reader

Source: Microsoft wins Facebook bid battle

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23 pointsterpua18 comments

Facebook is the Pets.com of the new bubble. Once facebook fails the bubble bursts. They are paying for hype.You have to be able to make money to have a valuation of 15billion. Facebook made 50 million this year.The valuation is 300x their income. whatever ...i'm going to bed

News Corp paid 580 million for myspace. MSFT paid 240 Million for 1.6 percent of facebook. ...guess which one of these companies has access to a financial spreadsheet application?

Obviously, Microsoft can lose 240 million dollars without much harm, but this unbelievable idiocy means that microsoft will either have a vast change in management very soon or an untimely death.

News Corp got Intermix for bargain basement prices due to some good old fashion shareholder swindling. News Corp probably had nothing to do with it, but it was inarguably an artificially low price. Though even had they paid what, at that time, would have been market rate, it still would have been an infinitely better deal.

Let's not pretend that Google wasn't willing to pay the same amount (or at least similar).

i guess that makes the 1.6 billion YouTube acquisition a bargain, which is now counting 250 million visitors per month...

It's great for the people who founded Facebook, but personally i don't understand Facebook's valuation other than the networking effect. To me it's ridiculously overpriced. I wonder if that would make me less suitable to be a startup founder.

15b isnt too too expensive really

broadcast.com was once worth 4b, amazon.com is worth 40b

heck the value of google has INCREASED 50b in just the last 6 months

facebook is a VERY important site. where else can I go on the internet to place ads targeted to a location AND interest. An insane percentage of those under 25 have fb accts, and the whole next generation will be locked into fb as they follow their older peers.

facebook has the internet on lock

Amazon sells stuff. Google makes money from a fantastic advertising business model.

What does facebook do again?

No one clicks on adverts on facebook.

The banner ads aren't where they make their money, it's in the mini-feed ads and the sponsored groups and beyond. Yesterday, Axe sponsored a free gift on Facebook and now 250,000 profiles are permanently decorated with an Axe advertisement.

Just wait until Axe realise their ROI is practically 0. Perhaps they can make it work, I don't know. I do know that when I started seeing adverts in my mini-feed I thought "For god sake it goes downhill now, I don't think I shall be using facebook much longer"

Just to add:

Google made a great business model by placing relevant adverts along side natural search results. People click on them because in some cases, they are what they wanted to find.

Facebook advertising 'Axe' in my minifeed (Which is supposed to tell me whats going on with friends etc), is totally wrong. It's like a popup. It's in no way relevant. No one will click on it/care about it, and it'll just drive users away to whatever's next.

"An insane percentage of those under 25 have fb accts, and the whole next generation will be locked into fb as they follow their older peers. facebook has the internet on lock"

Do you still use your friendster account?

A $240M investment on a $15B valuation means Microsoft gets 1.6%, probably not the best outcome for Mark Zuckerberg. Looks like Facebook's investors are trying to make sure their share doesn't get diluted any further.

Also, this is great. Valleywag predicted the announcement shortly before it happened because the heads of PR at Facebook and Microsoft added each other as friends today: http://valleywag.com/tech/confirmed/facebook-and-microsoft-f...

I assume you got the "not the best outcome for Mark Zuckerberg" from Valleywag, too?

I don't see why a higher valuation is "not the best outcome" for anyone invested in Facebook. Unless things are structured oddly, Mark Zuckerberg is being diluted as much as anyone else. Which is, not much at all. And wasn't $250 million the amount they wanted to take?

What a fine example of Winner's Curse: http://en.wikipedia.org/wiki/Winner's_curse

Sounds like $240 million a small price (for Microsoft) to pay to beat Google at something.

'we can make stupider investments than you'? ;)

MSFT is letting their ego get the best of them here for sure. They'd be a horrible poker player, which I guess might be why Bill, while the richest man at the world, hung out at the $3/$6 tables.

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