facebook/microsoft in an ala carte deal

techcrunch liveblogged of the press conference:

some quick thoughts:

i think the question everyone has is why isn’t the deal for 5% – 10% as rumored? assuming that zuckerberg was the one in the driver’s seat in the negotiation, i assume it’s his doing that this deal isn’t for more money or broader in scope.

microsoft achieved/missed:
+ bootstrapping adcenter so people have some real compelling reason to use it. it’s ads, ads, ads in microsoft; reign of kevin johnson continues.
+ secured two additional years of ads exclusivity, plus gone from us only to global
+ 240M is pocket change for microsoft, shareholders would be happy with not spending that much but helping ads
– the limited scope of the deal, in terms of dollar as well as in time, may fit with ballmer’s attitude that social networking is a fad
– did not help any of the other windows live / office live properties, such as messenger, spaces, etc.
– 1.6% doesn’t buy ballmer much leverage with facebook. this is an ala carte deal, anything else microsoft wants from facebook, ballmer will have to pay.

from facebook’s perspective, seems all positive:
+ getting a big player to validate that we are worth $15b is a-okay!!!
+ well positioned now to get good valuation from additional investors, as well as posturing for an ipo
+ did not have to give up anything to microsoft regarding its vision, its platform
+ microsoft’s investment is minimal and won’t have much sway over the board or officers
+ switching ads provider to another party in 2011 is easy as pie
+ checking google’s dominance, who is a bigger threat than microsoft anyway
– adcenter’s limited reach currently may dissuade some smaller players from buying ads on facebook; bigger player wouldn’t care anyway

google lost an opportunity:
– risk of seeing facebook explode in popularity and loses out a way for its advertiser to reach that space
– adcenter gets in the game, whereas before it’s virtually non-existent
– did microsoft’s slowing dow of the doubleclick acquisition cause them this deal? hmm…
+ not lost forever, can come back in 2011 and bid again

yahoo just lost completely, its financials limited it from even entering the field. can microsoft pass panama on reveune from this?


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