Microsoft invests $240M in Facebook at $15B valuation

The rumors are true – Facebook has agreed to sell a 1.6% stake in the company to Microsoft for $240 million, valuing the company at a whopping $15 billion. In addition, Microsoft will become Facebook’s exclusive third-party advertising partner and will begin selling Facebook inventory internationally in addition to the US. According to a statement issued by the companies,

“We are pleased to take our Microsoft partnership to the next level,” said Owen Van Natta, Chief Revenue Officer, Facebook. “This relationship will allow Facebook to continue to innovate and grow as a technology company, as well as bring relevant advertising to Facebook’s nearly 50 million active users.”

“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 for our two companies, but also our collective users and advertisers,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “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.”

It looks like Microsoft’s president of the Platforms & Services Division Kevin Johnson was able to outbid Google this time around. As a small footnote, in a conference call after the announcement, Facebook declined to confirm or deny the existence of other investors in the round.

Update: Forbes’ Elizabeth Corcoran reports that Facebook indeed took an additional $500M at the same $15B valuation from two undisclosed hedge funds. If true, great move.

[tags]facebook, microsoft, advertising, partnership, investment[/tags]

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11 Responses to “Microsoft invests $240M in Facebook at $15B valuation”

  1. Sam says:

    In 2000, the assumption was that Yahoo could capture up to 20% of off line ad dollars within 10 years. Remember Yahoo was valued at around $90 billion at the time? Guess what folks – nothing is completely defensible and least not when it comes to internet destination sites or electronic ad networks. There is no border, there is very little cost to build, and absolutely no end to the upper limit of the supply of internet “space” for content, commerce and advertisements. The only real border or limit that matters is the population of the people consuming the advertising and the return, or lack thereof, on those ad dollars.

  2. says:

    I think its exciting to see what’s happening with Facebook. Microsoft’s new valuation will revolutionize the industry, I’m sure they’re glad to finally be at the forefront of something – they totally missed the boat on search and email.

  3. Inside Facebook » Chinese billionaire joins Microsoft in Facebook's $15B round says:

    [...] now secured $300M in new capital for Facebook (the previous $240M came from Microsoft as part of a larger strategic deal). Apparently, hedge funds are still backing off from the deal because of unfavorable [...]

  4. Inside Facebook » Facebook Takes Out $100 Million Loan for Server Farms says:

    [...] equity is involved. The company has raised over $360 million in venture capital in the last year – $240 million from ad partner Microsoft, and $120 million from Chinese billionaire Li [...]

  5. Inside Facebook » Facebook Enters Search Agreement with Microsoft says:

    [...] last year, Microsoft made a $240 million strategic investment in Facebook at a stratospheric $15 billion valuation. As part of that deal, Microsoft gained rights to sell [...]

  6. Inside Facebook » Facebook Temporarily Rolls Out, Turns Off Live Search Integration says:

    [...] As part of Microsoft’s partnership with Facebook (which includes the software giant’s $240 million investment in the company last year), Microsoft will sell the search ad inventory for Facebook Web [...]

  7. Inside Facebook » Zuckerberg Says Facebook’s Focus is on Growth, Not Revenue says:

    [...] probably somewhere between $300-$400 million in the bank from a combination of recent equity investments and debt financings, it makes sense for Facebook to make sure they build out a widely [...]

  8. Microsoft, Facebook Announce News Feed Syndication in Windows Live says:

    [...] integrations reflect the deepening partnership between the two companies following Microsoft’s $240 million investment in Facebook and the formation of a deep advertising sales partnership over a year ago. This depth of [...]

  9. I social network sono irritanti. Parola di Bill Gates || says:

    [...] Forse solo personale: ricordiamo che Microsoft possiede l’1,6% delle azioni di Facebook, acquistate nel 2007 investendo una cifra di circa 240 milioni di [...]

  10. How Forbes Magazine Misinformed Its Readers About Facebook And Cost Them A Fortune — SecondShares says:

    [...] to fully understand the future value of Facebook when it invested $240 million in Facebook at a $15 billion valuation or 1.6% of the [...]

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