By Victor Karamalis
Facebook is looking to get even more cash from Microsoft according to the Wall Street Journal. The Redmond based company is in talks with Facebook to buy a five percent stake in Facebook as reported in the Wall Street Journal and Reuters earlier today. This is already in addition to the 200 to 300 million dollars that Microsoft committed through 2011 from last month’s advertising deal.
The deal is worth to be about 300 to 500 million dollars. This roughly brings Facebook’s valuation nearing $15 Billion dollars. The reason for Microsoft to buy a stake in Facebook is the 39 million user base (up from 24 million in May). They want access to the youth demographic actively using Facebook. Its founder Mark Zuckerberg has always said that he wants to keep it independent before it goes to the market for a seemingly realistic IPO.
The problems that both Microsoft and Facebook face in courts worldwide seem to be more of nuisance issues than blocks. Facebook’s problems stem from a 50 state investigation on web sexual predators. Earlier today, New York Attorney General Andrew Cuomo’s office subpoenaed Facebook and “accused it of not keeping young users safe”. Last week, Microsoft had its share of problems when European Union courts upheld a lower court’s decision on embedding the Windows Media Player with its operating system. These judicial issues validate the actual reach that the social networking site and the software maker have on the U.S. and the world respectively.
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