The word on the street is that Microsoft is interested in a 5% stake holding in Facebook. Apparently, the team at Facebook are all ears. This news comes only weeks after there were rumors that Facebook were about to engage in a new round of funding.
This could create an interesting ‘dutch auction’ type situation for Facebook, a la Google. According to the Wall Street Journal, ‘people familiar with Microsoft’s discussions with Facebook’ have indicated that the 5% stake holding could be valued some where between $300 million to $500 million.
So far, Mark Zuckerberg and the Facebook team have only ever sent signals that suggest the start-up had no plans to sell out either privately or with an IPO. A quick play on the calculator shows that the apparent value put on a 5% stake holding in the company makes the total value of Facebook in excess of $10 billion.
Personally, I hope that facebook hold out for as long as possible and avoid too much interaction/agreement with the big players in the industry. What Facebook has brought to the internet over the past few months is quite revolutionary and it would be nice to see this develop further.
I am also hopeful that Mark Zuckerberg truly believes that Microsoft and Google are beatable. The intentions of the later two organizations to invest in Facebook will only be to grow their respective ad network platforms. Facebook has the potential to turn the internet on its ear, a lot like Google did a few years back.
What would you do if you were Mark Zuckerberg right now? Prepare to take the money and run?