2008 Woodie Awards
Microsoft invests $240 million into Facebook
Corporation looks to strengthen advertising
Tyler Larson
Issue date: 11/1/07 Section: News
To try and deepen its relationship with Facebook and become its exclusive third-party advertising platform party, Microsoft Corp. invested $240 million into the social network for a 1.6 percent stake.
"We are pleased to take our Microsoft partnership to the next level," Owen Van Natta, chief revenue officer of Facebook, said.
"We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to nearly 50 million active users of Facebook," Van Natta added.
Along with control over advertising in the United States, Microsoft is expected to also take Facebook outside of the country and advertise all across the world.
"Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only our two companies, but also our collective users and advertisers," Kevin Johnson, president of the Platforms & Services Division at Microsoft, said.
As part of the proceedings, Microsoft valued Facebook with a $15 billion appraisal, a number much greater than the $580 million News Corp. spent for outright ownership of Myspace.com only two years ago. Along with Microsoft's $15 billion appraisal of Facebook alone, Johnson stated that he believed the current overall online advertising marketplace is valued at around $40 billion.
"The [advertising business] is going to grow significantly over the next two to three years to over an $80 billion marketplace. So, that's point number one, this online advertising industry is a big industry," Johnson said. Facebook is currently the second largest social network and fastest growing network with 30.6 million U.S. members just behind Myspace.com's 68.4 million.
The distant third is "Windows Live Spaces," which has attracted just around 10 million United States visitors.
"We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership," Johnson said.
By making this deal, Microsoft seems to have beaten Google Inc. to the punch after missing out on such high stakes bidding wars like AOL, the ownership of online video pioneer YouTube and internet advertising service DoubleClick Inc.
"Being a technology company, which is the way that we [at Facebook] certainly view ourselves, being able to deepen the partnership with one of the greatest technology companies on the planet was absolutely something that made sense for us," Van Natta said.
"We are pleased to take our Microsoft partnership to the next level," Owen Van Natta, chief revenue officer of Facebook, said.
"We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to nearly 50 million active users of Facebook," Van Natta added.
Along with control over advertising in the United States, Microsoft is expected to also take Facebook outside of the country and advertise all across the world.
"Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only our two companies, but also our collective users and advertisers," Kevin Johnson, president of the Platforms & Services Division at Microsoft, said.
As part of the proceedings, Microsoft valued Facebook with a $15 billion appraisal, a number much greater than the $580 million News Corp. spent for outright ownership of Myspace.com only two years ago. Along with Microsoft's $15 billion appraisal of Facebook alone, Johnson stated that he believed the current overall online advertising marketplace is valued at around $40 billion.
"The [advertising business] is going to grow significantly over the next two to three years to over an $80 billion marketplace. So, that's point number one, this online advertising industry is a big industry," Johnson said. Facebook is currently the second largest social network and fastest growing network with 30.6 million U.S. members just behind Myspace.com's 68.4 million.
The distant third is "Windows Live Spaces," which has attracted just around 10 million United States visitors.
"We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership," Johnson said.
By making this deal, Microsoft seems to have beaten Google Inc. to the punch after missing out on such high stakes bidding wars like AOL, the ownership of online video pioneer YouTube and internet advertising service DoubleClick Inc.
"Being a technology company, which is the way that we [at Facebook] certainly view ourselves, being able to deepen the partnership with one of the greatest technology companies on the planet was absolutely something that made sense for us," Van Natta said.
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