Microsoft deal values Facebook at $15 Billion

Microsoft finalised a $240 Million deal to purchase a 1.6% stake in the social networking site Facebook.  The deal value Facebook at approximately $15 billion.

Microsoft beat Google who was also bidding for a similar stake in the three year old social networking site.

As part of the agreement, Microsoft secured the right to sell contextual ads on Facebook’s international sites..

Kevin Johnson, president of Microsoft’s platforms and services division, commented: “This is a strong statement of confidence in this partnership and in Facebook.”

Mr Johnson added that the high price paid by Microsoft for a stake in Facebook reflects on its belief that the social networking site could eventually reach to 300 million users - It currently reaches 50 million users per year.

Mr Johnson continued: “You combine the number of users with the monetisation opportunities and you can figure out a fairly modest average revenue per user per year and you can very quickly get to this level of valuation.”

Facebook was founded in 2004  by Mark Zuckerberg as a Harvard-based social networking site. Today it claims to be attracting 250,000 new users each day.

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