Wednesday, October 24, 2007
Current Event Blog: October 25th
In looking for a current event's article that has to do with things we have talked about in class, I was able to stumble along an article in the New York Times about the ongoing battle for a stake in Facebook and in this article, it goes on to say how Microsoft won that battle with a bid of $240 million.
In a battle staged against Yahoo and Google, Microsoft won the battle with an offer of $240 million. In spending all of that money, Microsoft will receive a 1.6 % stake in Facebook and will also get the opportunity to sell banner ads appearing on Facebook outside of the US, splitting the revenue with the previously mentioned company. This will add to the agreement already in place between Microsoft and Facebook which is a contract through 2011 which allows Microsoft to run banner ads on the site but only in the United States.
It only goes to show you how a free website, created for advertising and social networking (ala MySpace), can create such an astronomical amount of revenue by virtue of the public's reaction to the website and company, thus forcing larger and more powerful companies to get involved and expand their industry, creating more of a money making opportunity for the little, free to sign up social networking website. Just think about this. Mark Zuckenberg, the 23 year Harvard drop-out who is also the founder of Facebook, owns a 20% share of Facebook, which is valued at about $3 billion. Unbelievable.
In a battle staged against Yahoo and Google, Microsoft won the battle with an offer of $240 million. In spending all of that money, Microsoft will receive a 1.6 % stake in Facebook and will also get the opportunity to sell banner ads appearing on Facebook outside of the US, splitting the revenue with the previously mentioned company. This will add to the agreement already in place between Microsoft and Facebook which is a contract through 2011 which allows Microsoft to run banner ads on the site but only in the United States.
It only goes to show you how a free website, created for advertising and social networking (ala MySpace), can create such an astronomical amount of revenue by virtue of the public's reaction to the website and company, thus forcing larger and more powerful companies to get involved and expand their industry, creating more of a money making opportunity for the little, free to sign up social networking website. Just think about this. Mark Zuckenberg, the 23 year Harvard drop-out who is also the founder of Facebook, owns a 20% share of Facebook, which is valued at about $3 billion. Unbelievable.
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A good post. Understanding the competition between the key internet corporations over social networking sites like Facebook is important. What is at stake in these deals?
The size of the fortunes made by people like Mark Zuckenberg is simply astounding.
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The size of the fortunes made by people like Mark Zuckenberg is simply astounding.
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