In a firm declaration, Microsoft CEO Steve Ballmer asserted that the company “didn’t make a mistake” when it invested $240 million in a 1.6% stake in Facebook, the current online social networking darling. Ballmer said this at a business conference in Mumbai.
He also seemed to clarify Microsoft’s relationship with the implicit valuation of Facebook, saying that “The valuation of Facebook is still to be determined…Will Facebook be worth $5 billion, $15 billion or $50 billion some years down the line is really up to their team and how they take it forward.”
Ballmer also spoke indistinctly about Microsoft’s interest in purchasing Yahoo!, responding to a question about a possible interest by saying, “My answer is a considered 'no comment’.” He added that Microsoft is currently looking to achieve success in online advertising, and that “What happens with Yahoo, we’ll all have to wait and see.”
Is it possible that Microsoft, seen by many as a fallen giant (though still a giant), is investing in a trendy site that could follow its downward path? Preston Gralla at Computerworld would probably think so.
Gralla warns that Facebook’s “party” will come to an end soon, as it broadens its scope in the midst of increasing competition that is focusing more on niches.
“Facebook clearly isn't going away, but its sky-high valuation will shrink,” he said. “It will ultimately become just one more site in a constellation of others, and not necessarily the brightest one.”
Sources:
http://news.yahoo.com/s/nm/20071105/wr_nm/microsoft_facebook_dc;_ylt=
Amtvd5cNceov3JHrZkP0Wvf6VbIF
http://blog.wired.com/business/2007/11/microsoft-ceo-f.html
http://www.computerworld.com/blogs/node/6483
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