Microsoft buys (a bit of) Facebook
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Techcrunch is reporting that Microsoft has bought a share of 1.6% of Facebook for $240 million. The deal values Facebook at a stonking $15 billion.
Microsoft already has the gig selling advertising to Facebook’s US users and this investment will see that deal expanding internationally. Assuming Microsoft are going to tie this to their AdCenter product this might finally give the volume of impressions and clicks that they need to start attracting some serious ad spend away from Google.
Facebook is attractive to advertisers for a number of reasons. Firstly, the sheer number of users is huge. Secondly, Facebook by definition has lots of demographic data about their users making ad targetting much more accurate. (Microsoft already allow AdCenter advertisers to pay a premium to target certain demographics based on users MSN profiles). Thirdly, Facebook stills has its college roots and this late teen-early twenties demoographic is an ideal market for high value shiny gadgets (think iPods, mobile phones etc)
The question though is whether Facebook users will actually click ads. Anecdotal evidence suggests that clickthroughs on social network sites in general is poor. Users are there for the social element not to go shopping.
You also have to ask if this is more evidence of a second dotcom bust approaching. Is Facebook really worth $15 billion?
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