[qi:010] How much is a 5 percent stake in Facebook worth? $300 million? $500 million? $750 million? It all depends on how desperate the buyer is and how well Mark Zuckerberg can play a game of corporate poker. Rational thinking long ago flew out the window when it comes to anything Facebook.
The Wall Street Journal, citing unnamed sources, is reporting that Facebook and Microsoft (MSFT) are in early talks about an investment that could value Facebook at upwards of $10 billion. Although the valuation is huge, the talks themselves shouldn’t come as a surprise, for Microsoft executives have long been enamored of the fast-growing social network based in Palo Alto, Calif.
If the Z-meister takes the cash, then in a sense he is getting an
put call option from Microsoft, which prevents Facebook from embracing anyone else. Like Google (GOOG). It also ensures that Microsoft’s advertising business doesn’t go elsewhere…ever! The Journal says that fresh cash is needed to buy others and pay for infrastructure investments.
Of course, when you have little a monetization issue, like Facebook has (and refuses to talk about), it is time to get OPM: other people’s money!