On Facebook Stake
And Web Ad Boom
Microsoft Corp.'s $240 million investment in Facebook Inc. -- a three-year-old company with more promise than profit - represents a huge bet that the online advertising boom will continue and the popular social networking site will be among the biggest beneficiaries.
The software giant said yesterday that it will buy a 1.6% stake in Facebook, beating out Google Inc. after intense lobbying. The deal places a $15 billion valuation on the closely held Palo Alto, Calif., start-up. Facebook, which runs a site where people set up personal Web pages, expects to break even this year, on a cash-flow basis, with revenue of $150 million, according to people familiar with the company.