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Report: Microsoft plans to keep its Facebook stake

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Microsoft won’t be among the large investors selling shares in Facebook when the opportunity arises later this week, according to a  report over the weekend.

Bloomberg News says the Redmond company will be holding on to its stake in the social network as a “strategic investment” that goes along with its partnership with Facebook. As we’ve noted in the past, the Facebook investment is one of the smartest deals Microsoft has made in recent years, not because of any direct financial gain but because it made the companies stronger allies.

The Facebook partnership has helped Microsoft Bing incorporate social data into its search results, among other features.

Big investors will be able to start selling their Facebook shares on Thursday as a post-IPO lockup period expires. But Facebook’s struggling share price has reduced the gains those investors would see.

Microsoft, which invested $240 million in Facebook in 2007, owned 1.7 percent of Facebook after its initial public offering, valued around $572 million based on the current share price.

  • guest

    The FB deal was all about Bing. Bing loses billions every quarter and hasn’t gained a single % share against Google. So how “smart” can it really have been? If it weren’t for the accident that MS’s stake in FB is worth more currently than MS originally paid when they “invested”, you’d have a hard time pointing to any concrete way in which MS has actually benefited. At best you’d be left with a bunch of arguments that go something like “but think how much worse off MS would be in product_x without the FB tie in”. It’s not the dumbest deal Ballmer ever did. But smart? Unclear.

    • http://www.facebook.com/people/Mike-Christensen/676694755 Mike Christensen

      I think “Bing loses billions every quarter” is a bit of an exaggeration heh.. More like a few hundred million.

      • guest

        My bad. I edited what I originally had and forgot to change “quarter” to “year”. $8 billion lost so far. And billions more each year.

  • Guest

    A brilliant move. Microsoft bought 900 million Bing users for 25 cents each. Most people I know use Facebook as their primary connection vector, so to tie Bing web search to Facebook would be a brilliant win-win.

    • guest

      Huh? FB reportedly has 900M users. How many are actually using it, versus having a throwaway FB alias, is unknown. And just because FB uses Bing, doesn’t mean FB users are using it. Like everyone else, they can and probably do use Google for the majority of their searches. So you were saying…

      • Guest

        Of course FB users use Bing. When you type into that search box at the top, you’re Binging.

        Bing Maps, Bing Travel, Bing Search… the 900 million Facebook members have turned Bing into the world’s fastest-growing search engine!

        • guest

          You forgot the main one: Bing Losses, which is all MS has to show for more than a decade’s effort in search. Google stock up. Apple stock up. MS down, as usual. Think it might have anything to do with idiotic business moves like Bing?

          • Guest

            Of course not! Bing is an investment in the future, not an “idiotic business move” like buying Aquantic or whatever company it was.

            Many counted Apple out after 10 years of losses when the company was transforming itself from a boring beige-boxer to a sleek design house. Microsoft is similarly undergoing a metamorphosis, and when it comes out, watch out!

          • guest

            Have you noticed that while MS has been using the “investing in the future” excuse for everything from Xbox to search, Apple has gone from near bankruptcy to almost twice as big as MS in revenue and more than twice as valuable? The only metamorphosis MS is undergoing is from former leader to has been.

          • Guest

            Apple, as a company, is on the way out. iPhone 5 has been delayed by more than a year, Apple TV is still an underperforming “hobby,” and iPad has already been lapped in performance. What would you say if I told you that Android phones are outselling the iPhone line 4-to-1 now?

            I’d say that Microsoft is on the way up and its erstwhile competitor is going away.

          • guest

            It must be great to live in denial. Much easier than facing MS’s real problems. Apple isn’t going anywhere except higher. They were never going to win the volume leader race in phones. They’re happy enough to let Samsung/Google have the low/no margin business while while raking in the majority of industry profit as either #2 or even #3. iPad may have been lapped in performance, but not in sales or profits, where it’s still the defacto leader. And last quarter ATV sold more units than Xbox. And they didn’t lose money doing it, unlike MS.
            MS is circling the drain. The battle is now between Samsung, Google, and Apple.