Published in Cynopsis:Weekender, 10/25/07
By Jordan Yanco
Remember Monopoly by Parker Brothers? Whenever three or more people play, there’s always some wheeling and dealing for property. Well, Facebook just sold 1.6% of its stake to Microsoft, along with a seat on the Facebook Board.
Facebook’s investors, including Accel Partners and Greylock Partners have the company worth an estimated $10-15 billion dollars according to the latest valuation. Microsoft’s new 1.6% stake cost them four hundred eighty thousand of those orange $500’s. That money will now serve as capital for buying servers and engineers (houses and hotels) and expanding the company. They plan to double their employees to 700 in the next year.
This is a big win for Microsoft considering the favorite was Google, that young newcomer who seemed to land on and buy all the right properties the first two times around the board, including Boardwalk and Park Place. The whole world seems to have landed on Boardwalk to the point where Google has practically become the new banker. Maybe they can consider this a win seeing as how they made Microsoft spend heavily for Facebook’s hot corner of green and yellow properties.
Microsoft certainly had the money to play, though. They’ve been around the board more than a few times, owned the blue and purple properties since the 80’s and even got in trouble a few years back for owning all the railroads. They also struck a deal with Facebook in September for U.S. ad sales good until 2011. With this new acquisition, the deal will be expanded into international ad sales. Had Google ended up winning, that property would have been mortgaged, and Google would have easily bought it back from the bank.
Facebook has also reported that they will be announcing their new ad network at the upcoming Ad Tech Conference in NY November 6th. Will it be a Google network or a Microsoft one?
As any great Monopoly player will tell you: stacks of orange $500’s might seem appealing in the short term, but dwindle quickly with poor decision-making. Let’s not rule Google out just yet. There may be more deal making in the works.