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Facebook Feeding Frenzy

More Investor Cash for Facebook

Yesterday we learned that Microsoft bought 1.6% of Facebook for $240 Million. Today there is another large investment – it’s been rumored that Facebook got an additional $500 million from two New York hedge funds. Part of that deal is that Microsoft will do more advertising on the site. Facebook has a jaw-dropping $15 billion valuation. This is incredible. Together the new investments are for about the percentage that Microsoft owns.

Elizabeth Corcoran from Forbes Magazine broke the story yesterday and the news spread faster than the California wildfires (which, thank goodness, are slowing).

Facebook was seeking $750 million from the get-go and are at $740 and have only given up about 5% of the company. And we don’t know their revenue but it’s based on advertising. Estimates put their revenue at $100 million for last year.

Digg for Greens = Hugg

Here’s a niche social network you’ve probably never heard of – it’s like Digg for environmentally friendly stories. That means you can vote for stories and try to promote them to the top of the list. Hugg is a green version of Digg and they even tout that in their of their taglines – It’s Digg for Green. If you go there you’ll find environmentally friendly stories videos, and links. Plus you can share green information with the community of other like-minded [tree] Huggers.

So far the community looks small. The first story is “Top 10 Amazing Facts about Animals.” This is a niche community which is perfect if your business or blog fits. Google loves relevant links, so it’s a great way to get a targeted link and the site has a PageRank of 6. There should be a niche community like this for more topics.

Why Microsoft Needed Facebook & Google Didn’t

image So, after weeks of speculation, Microsoft won the battle over Facebook, with Google second, and Yahoo embarrassingly nowhere to be seen. While it may seem that Google’s lost momentum–by not partnering with Facebook–I see it more as a sign that Microsoft knew Facebook was its only hope.

Let me explain.

Social networks are hot, hot, hot, right now. It doesn’t really matter which one you prefer–MySpace, Bebo, Facebook, or Dogster–social networks are the next evolutionary step in the growth of the internet. Now that we’ve all learned to check our email, order online, research restaurants, and read news, we’re starting to use the web to connect with each other. We’ve realized that we enjoy making connections, sharing our random thoughts, and turning our friends into virtual zombies. Social networking is the second generation internet.

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.

Facebook Sets the Date (for New Ads)

No, Facebook isn’t announcing the date for its impending nuptials, but it’s sent out engraved invitations (literally) for an event next month in New York, as AdAge writes:

The invitation, sent to advertisers and agencies in New York, arrived carved onto a Lucite brick:

“You are invited to a discussion with Mark Zuckerberg and the Facebook executive team as we unveil a new way of advertising online.”

AdAge speculates that this could be the unveiling of the meaning of a term first used and trademarked by Facebook last month, “SocialAds”:

described as “advertising and information distribution services, namely, providing advertising space via the global computer network [and] promoting the goods and services of others over the internet.”

MySpace Dominates in the US

Datamonitor predicts that social networking sites will level off around the world in the year 2012. They also predict that the plateau will hit even sooner in the US. In the meantime, global active memberships in social networking sites are growing. They’re expected to reach 230 million at the end of 2007 (this includes multiple memberships by one person).The money is good and growing.

For example, my friend’s Facebook App that took two weeks to build recently sold for $25k. And marketers who are savvy are getting a lot of press for their social networking presence. There is a lot of money and creativity being exchanged. “Revenues from social-networking services should reach $965 million, growing to $2.4 billion by 2012, writes MarketingCharts.”

Rumor Mill: Microsoft & Google Vie for Facebook’s Hand in Marriage

image The New York Post is bold in its prediction that Facebook will announce which suitor will win its hand in marriage, in the next 48 hours.

It seems it’s a two-horse race with Google and Microsoft both vying to buy a 5-10% stake in the social network.

The Post suggest Google’s trying to run-up the price to try and scare off Microsoft. It doesn’t appear to be working…

…Microsoft is hanging tough, despite recent comments by CEO Steve Ballmer that social-networking sites were “a bit faddish.” One source said the Redmond, Wash.-based company is “willing to give any valuation possible” to keep Facebook away from Google.