Microsoft sounds out Facebook

 

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Posted on 8 May 2008 at 07:50

With $44 billion burning a hole in its pocket, Microsoft has reportedly approached Facebook with a view to buying the social networking site.

Microsoft's investment bankers approached Facebook when it became clear that the company's bid for Yahoo was doomed to fail, according to a report in the Wall Street Journal.

However, the Journal's source claims that there are no active discussions between the two companies, and that it's unclear whether Facebook would even be prepared to sell.

Microsoft already owns 1.6% of Facebook following a $240 million investment in the site last October. That deal put Facebook's valuation at $15 billion - around a third of what Microsoft was prepared to pay for Yahoo.

Facebook's value has doubtless increased since last year, however, and the social network's founders have long stated that they have no interest in selling the company outright.

The company turned down a $1 billion bid from Yahoo in 2006, although before the Microsoft investment last year, the company's director Peter Thiel said that "if we got an offer of $10 billion, we would probably listen to them."

Microsoft would probably have to double that figure to have any chance of success now.

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Author: Barry Collins