An Argument in Favor of MicroBook

At one point or another, most of the big online media companies have talked about buying Facebook. Yahoo is rumored to have made an early offer of almost $1 billion for the company, which was (obviously) turned down. But as the MicroHoo discussions appeared to be deteriorating, Microsoft apparently made some formal inquiries about Facebook’s willingness to be acquired, according to the Wall Street Journal.

There are a number of people who believe that buying Facebook for $15 billion (its purported valuation) would be a foolish move for Microsoft. That price tag would make it the largest acquisition in Microsoft history by about $9 billion (aQuantive was $6 billion), but still less than a third of the proposed $47 billion that Microsoft was prepared to pay for Yahoo.

When Facebook Platform was first announced in May of last year with Microsoft as one of its inaugural partners, it immediately struck me that Microsoft would eventually acquire the social network. Then, when Microsoft made its $240 million investment, it seemed the company was moving on a path toward that eventual outcome.

There are very few, if any, companies beyond Microsoft with the cash or the willingness to pay $15 billion for Facebook — not even Google. Its only other recourse would be an IPO. While that might quickly elevate the top executives at the company to the Forbes’ billionaires list, becoming a public company presents many challenges for Facebook.

The rest of this post is at SEL.