Microsft Buys 1.6% Stake in Facebook; Taps Into Hedge Funds For $500 Million More?

Microsoft beat out Google to buy a small stake ($240 million, which works out to 1.6 percent) in Facebook. Note that this is a much smaller stake than the previously rumored conversations which put the number in the 5-10 percent range. Microsoft’s ad deal with Facebook will expand to an exclusive arrangement for third-party ads, which will also be served to international visitors. It also puts Microsoft in the driver’s seat for any subsequent talks and investments that may take place down the road. It is being rumored that two NYC hedge funds have each matched Microsoft’s investment in Facebook for about $250 million each, at the same $15 billion valuation. If true, that would give Facebook a $750 million war chest, which is more than most companies make in an IPO.
http://www.lostremote.com/2007/10/24/microsoft-buys-stake-in-facebook/

http://www.news.com/8301-13577_3-9803872-36.html

http://www.techcrunch.com/2007/10/25/facebook-taps-into-hedge-funds-for-500-million-more/