When Microsoft walked away from its blockbuster bid for Yahoo, the media sought desperately to keep the news coming even when there wasn’t much left to say. That seems to be how The Wall Street Journal came up with the notion that Microsoft had approached Facebook about an acquisition. It’s not true.
Good sources at Microsoft (MSFT, Fortune 500) recently have told me several things. First, that absent a shocking new development, the Yahoo pursuit really is over. Second, that there is no near-term interest in “replacing” the Yahoo deal with the purchase of another giant Internet business. Instead, smaller acquisitions of various sizes will continue over time.
Finally, there is virtually no likelihood of a deal soon either to buy Facebook or to increase Microsoft’s share in the popular social networking site. Facebook remains of great interest to Microsoft management, but the fact that Microsoft’s investment bankers may have contacted Facebook says little, if anything, about the true intentions of their client.
Facebook CEO Mark Zuckerberg isn’t even around these days to broker a mega-deal. He’s on a long around-the-world vacation trip, and is currently in India.
Last year, Microsoft paid a royal price for a tiny piece of Facebook – $240 million for about 1.6%. Much has been made of the $15 billion valuation that the deal placed on Facebook. Continue Reading »