The rumors are true – Facebook has agreed to sell a 1.6% stake in the company to Microsoft for $240 million, valuing the company at a whopping $15 billion. In addition, Microsoft will become Facebook’s exclusive third-party advertising partner and will begin selling Facebook inventory internationally in addition to the US. According to a statement issued by the companies,
“We are pleased to take our Microsoft partnership to the next level,” said Owen Van Natta, Chief Revenue Officer, Facebook. “This relationship will allow Facebook to continue to innovate and grow as a technology company, as well as bring relevant advertising to Facebook’s nearly 50 million active users.”
“Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only for our two companies, but also our collective users and advertisers,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership.”
It looks like Microsoft’s president of the Platforms & Services Division Kevin Johnson was able to outbid Google this time around. As a small footnote, in a conference call after the announcement, Facebook declined to confirm or deny the existence of other investors in the round.
Update: Forbes’ Elizabeth Corcoran reports that Facebook indeed took an additional $500M at the same $15B valuation from two undisclosed hedge funds. If true, great move.[tags]facebook, microsoft, advertising, partnership, investment[/tags]