In the latest Internet bonanza, Microsoft paid a staggering $240-million (about R1.5-billion) for a mere 1.6percent of Facebook, giving the second-largest social networking site the almost unbelievable valuation of $15-billion.<\/p>\n
It sounds like Monopoly money, and it is. As the fastest-growing site in the social networking phenomenon \u2014 let\u2019s call it the Faceboom \u2014 Facebook has been on everyone\u2019s acquisition list.<\/p>\n
A few weeks ago, when the rumours surfaced and Facebook chief executive Mark Zuckerberg went to Microsoft\u2019s headquarters in Seattle, I was sent several invitations to join a Facebook group that said: \u201cIf Facebook sells to Microsoft, we\u2019re leaving.\u201d<\/p>\n
How many are left, I wondered? The group I was invited to join had 441 members on Friday \u2014 big dent in Facebook\u2019s 50-million user base if they should jump ship.<\/p>\n
I think the purchase is a clever move by Microsoft, which has been on the back foot for years.<\/p>\n
At $240-million, it works out at $300 per Facebook user. That\u2019s a bargain for Microsoft , which is spending more than double that on that thing they made called Vista, which is a window onto frustration.<\/p>\n
Microsoft is spending $500-million on marketing Vista and the Facebook buy is a significant battle in wining its war with Google for online presence and the next generation of online interaction.<\/p>\n
Microsoft chief executive Steve Ballmer has said the company is evolving towards selling advertising (like Google) and Microsoft will now sell all Facebook\u2019s advertising outside the US. He is hoping Facebook will reach 300-million users.<\/p>\n
It\u2019s also a public relations coup for Microsoft after the Vista debacle, the document format blunder (more later) and any number of ill-advised recent missteps.<\/p>\n
Compare Microsoft hitching itself to Facebook\u2019s tail with HP spending $300-million to relaunch its Print 2.0 printing strategy \u2014 in part to make it easier to print from Internet sites. It\u2019s the same amount Intel spent marketing its newfangled wireless networking thing to increase sales of its WiFi-enabled Centrino chips.<\/p>\n
South Africa is the seventh most website populated country and Facebook surged past 350000 members this month. It was at 394986 people on Friday two weeks ago. The addition of almost 50000 members in about two weeks is pretty good considering most companies now block access to it.<\/p>\n
The \u201cWe are the Rugby World Champions\u201d website has 15169 members compared with the 11051 members of the \u201cOne Million People against Crime in South Africa\u201d website.<\/p>\n
The former no doubt includes President Thabo Mbeki, who has given Jake White the kiss of death by declaring he should stay on as the Springbok coach.<\/p>\n
Manto, Ivy, Selebi and a bunch of Aids denialists are among those Mbeki has defended in the past.<\/p>\n
Historically, such massive Internet real estate sales have yielded varied results.<\/p>\n
Rupert Murdoch was declared insane (for the nth time in his career) for paying 580-million for MySpace in 2005. This year he will earn 800-million in Google advertising.<\/p>\n
No one knows how Google\u2019s 1.65-billion for YouTube is faring, but eBay recently wrote off $1.43-billion for Skype, for which it coughed up 2.6-billion in 2005.<\/p>\n
Skype was the biggest thing online two years ago as Internet telephony seemed poised to topple the world\u2019s telephone companies \u2014 much like Facebook, YouTube and MySpace have been the flavours of the year for the last three years.<\/p>\n
Whatever you do, don\u2019t call it a bubble.<\/p>\n