When I first started playing around with social networks almost a decade ago I never in my wildest dreams expected I’d see the day one of them would be valued at $15 billion. Facebook, which already had deep ties with Micrsosoft through their ad serving solution, has agreed to take $240m in funding from them. In return, Microsoft will own less than 2% of Facebook, giving the fledgling social networking venture a valuation of $15bn. I’m sure the guys at Accel must be over the moon – their $13m investment in Facebook at a valuation of less than $100m seems like a really good deal.
According to the press conference the deal was inked today and for both companies they felt they had a good relationship in place already, this investment was simply an extension of it. They wanted to put together a deal that was “truly accretive for everybody”.
This new infusion of capital will be used to expand the Facebook platform – their userbase is doubling every two months. It will also be used to fund innovation and growth – expect to see the job boards clogged up by Facebook and not just Google 🙂 .
Innovation will focus on how Facebook targets ads. They have explicitly said they are not looking at search right now — I interpolate a possible stand off agreement with Google here, given that it has been suggested Google was also in the running to become a strategic investor in Facebook.