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Facebook Sells 1.6% to Microsoft for $240 Million



In a conference call a few minutes ago, Facebook and Microsoft announced a deal that sees the software giant taking a $240M investment in the social network.

Here’s the press release:

PALO ALTO, Calif., and REDMOND, Wash. — Oct. 24, 2007 — Facebook and Microsoft Corp. today announced that Microsoft will take a $240 million equity stake in Facebook’s next round of financing at a $15 billion valuation, and the companies will expand their existing advertising partnership. Under the expanded strategic alliance, Microsoft will be the exclusive third-party advertising platform partner for Facebook, and will begin to sell advertising for Facebook internationally in addition to the United States. Financial terms were not disclosed.

“We are pleased to take our Microsoft partnership to the next level,” said Owen Van Natta, vice president of operations and chief revenue officer at Facebook. “We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to the more than 49 million active users of Facebook.”

“Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only for our two companies, but also our collective users and advertisers,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership.”

Facebook continues to experience strong growth both in the U.S. and international markets; 59 percent of Facebook’s users are outside the U.S. With an average of 250,000 new users registering each day, Facebook continues to be one of the most-trafficked sites on the Internet.

On Aug. 22, 2006, the companies announced a U.S.-only strategic alliance that named Microsoft the exclusive provider of standard banner advertising on Facebook using Microsoft’s digital advertising solutions and the Microsoft® adCenter platform. In early 2007, the terms were extended to 2011.

UPDATE:
Hitwise sent us a whole bunch of cool data on Facebook:

  • Facebook.com was the ninth most visited website (as ranked by Hitwise) in the U.S. receiving .96% of all Internet visits for the week ending 10/20/07.
  • U.S. traffic to Facebook.com has increased 102% YOY comparing the week ending 10/20/07 versus 10/21/06.
  • Among a custom category of leading social networking websites, Facebook.com received 15% of U.S. visits for the week ending 10/20/07. That was second most among social networking websites behind MySpace.com, who received 76%. Windows Live Spaces received .40% for the same week.
  • Facebook.com received ’9.90%’ of its U.S. traffic from Search Engines for the week ending 10/20/2007. Of that traffic, MSN Search and Live Search combined for .46% to Facebook.com last week. Google sent 6.82% percent of U.S. traffic while Yahoo! Search send 1.34% of traffic for the week ending 10/20/07.
  • U.S visits for Facebook.com among users ages 35 and over have increased 19% comparing the week ending 10/20/07 versus 10/21/06.