This week Microsoft bought a 1.6 percent stake in Facebook for a whopping $240 million! That puts the value of Facebook at $15 billion! Now that is a lot of money for a company that does not even have 200 million in annual revenue. Myspace was bought back in 2005 for $580 million. Since that time speculations of how much it is worth range anywhere from $10-20 billion. So I would say the $15 billion is right around what Facebook should be valued at. Good thing Facebook did not take Yahoo’s 1 billion dollar offer last year.

So what does this $240 million get Microsoft? Well now they own 1.6 percent of the company (big deal). The bigger thing here is that Microsoft will be the exclusive provider of banner advertising and sponsored links on Facebook, of course using Microsoft’s adCenter platform. This is huge for Microsoft as their adCenter is a slow third behind Google’s Adsense and Yahoo’s Publisher Network. They are also sticking one to Google who won the bidding battles on YouTube and DoubleClick Inc. I think in Google’s mind it would have been nice to have the exclusive deal with Facebook, but unlike Microsoft it was not necessary.

Facebook is another great story of a kid who started the site from his dorm room in school. Mark Zuckerberg started the site while at Harvard and in less than 4 years it is valued at $15 billion! Myspace is the only social network larger than Facebook, but a lot more people are heading the way of Facebook. I know I am, I am tired of all the crap on Myspace, and I really like the clean look of Facebook. In my opinion it is a much better social networking platform. So when are we going to see Facebook stock? Make sure you get it early, look at the Google stock!