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Microsoft and Facebook today announced that MS will be taking a $240M equity stake in Facebook.

The deal solidifies Microsoft’s position as the exclusive advertiser on Facebook, and also puts an estimated value on Facebook of $15B, helping to set the stage for an IPO.  Microsoft beat out Google in the competition for the first equity stake in Google.  This also helps Microsoft in their efforts to compete with Google in the online advertising space, and could help to build on their recent advertising investments such as the acquisition of Seattle-based aQuantive.

Not everyone agrees however that this is a smart move by Microsoft, and think that valuing the company at $15B is a grossly high figure given the estimated $150M in revenue it is believed Facebook will earn in 2007.  It’s also interesting to note that MS already had an exclusive deal to provide third-party ads on the site, so it’s not entirely clear whether this represents a significant win for the company, other than to block Google out of the race to snatch up Facebook.


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