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Microsoft Considers Stake in Facebook

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Microsoft Considers Stake in Facebook

Business

Microsoft Considers Stake in Facebook

Microsoft Considers Stake in Facebook

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Microsoft is reportedly looking into buying a 5 percent stake in the social networking Web site Facebook. The prices being bandied about suggest FaceBook is being valued at about $10 billion.

RENEE MONTAGNE, Host:

And it looks like the big guys are in hot pursuit of one of the Internet's top social networking sites.

Microsoft is reportedly looking into buying a stake in FaceBook. That investment would value the company of at least $10 billion.

NPR's Wendy Kaufman reports.

WENDY KAUFMAN: A $10 billion valuation for a company launched just three and a half years ago by a Harvard undergrad is stunning. It reflects the degree to which Facebook has become a primary site for e-mail, creating mini-blogs, sharing pictures, videos, personal information, and much more. FaceBook now ranks among the top Internet sites for the number of visitors: about 40 million worldwide.

Charlene Li is an analyst at Forrester Research.

CHARLENE LI: There's a lot of interest in FaceBook now because they are on an incredible growth spurt, and also they have - people are - when they go on there, they're spending a large amount of time there.

KAUFMAN: Advertisers like that, of course. But FaceBook is more than a media site. Because of the way it has been built, all kinds of future services could be built into it or put on top of it, adding immensely to its value.

Microsoft's talks with FaceBook, first reported by the Wall Street Journal, are said to be preliminary, and neither company is discussing them publicly. Microsoft is desperately trying to strengthen its advertising platform to compete with Google and linking with FaceBook would do that. But Google isn't expected to stand idly by. It has reportedly had its own discussions about buying a stake in FaceBook.

Wendy Kaufman, NPR News.

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