Microsoft to acquire equity stake in Facebook; to expand advertising deal for international markets

Microsoft has announced its plans to acquire a $240-million equity stake in Facebook’s next round of financing, at a $15 billion valuation. The companies would also expand their existing advertising partnership to make Microsoft the exclusive third-party advertising platform partner for Facebook, and Microsoft will begin to sell advertising for Facebook internationally, in addition to the US.

“We are pleased to take our Microsoft partnership to the next level. 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 the more than 49 million active users of Facebook,” said Owen Van Natta, Vice President-Operations and Chief Revenue Officer, Facebook.

“Making this investment and expanding this partnership will position Microsoft and Facebook to take better advantage of advertising opportunities around the world, and is a great win not only for the two companies, but also our collective users and advertisers. 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 major reason why we decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership,” said Kevin Johnson, President-Platforms and Services Division, Microsoft.

With an average of reportedly 250,000 new users registering each day, Facebook continues to experience strong growth both in the US and international markets; 59 per cent of Facebook’s users are outside the US. In August 2006, the companies had announced a US-only strategic alliance that named Microsoft as the exclusive provider of standard banner advertising on Facebook, using Microsoft’s digital advertising solutions and the Microsoft adCenter platform. In early 2007, the terms were extended to 2011.