SAN FRANCISCO (AP) -- It's hard to determine what's more surprising about Microsoft Corp.'s investment in Facebook Inc. -- the appraisal that valued a 3 1/2-year-old Internet hangout at $15 billion or the rare snub of online search leader Google Inc.
The $240 million price Microsoft paid for a 1.6 percent stake in Facebook demonstrates just how badly the world's largest software maker wanted to deepen its relationship with a startup that doesn't even have $200 million in annual revenue.
By now everybody else in the Blogosphere has had their say.
Dealbreaker's Opening Bell:
So yeah, as you knows, Mr. Softy paid $240 million for a mere sliver of Facebook, giving the company a $15 billion valuation. This is the valuation that everyone has been talking about... but it still sort of hits you in the gut when it's actually announced.
Marketnews:Microsoft Buys $240M Stake in Facebook.com
Large corporations find social networking Websites, and other online entities like YouTube.com, appealing mainly due to their powerful consumer reach: even though members can join for free, these Websites attract millions upon millions of visitors daily. These visitors, in turn, ultimately create the content that make the sites so popular, resulting in overhead costs that are much lower than a typical online business would endure. And this translates to very lucrative business opportunities from the likes of advertisers such as Microsoft.
And so on.
I don't really have anything constructive or meaningful to add to the discussion. Is Facebook worth $15 billion? Pfft, I have no idea. But my basic cynicism and rationality makes me sad that someone else already coined the phrase Dot-Bomb 2.0.
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