From Silicon Alley Insider: Spurned Microsoft (MSFT) is now sending flowers to another Valley belle, Facebook, and this time she’s actually a spring chicken. As soon as this news hit the tape, our technology advisor Dwight Merriman ran over to the newsroom and made the following points in favour of this deal (as opposed to that old one):
- Unlike Yahoo (YHOO), Facebook is the global leader in its business.
- Unlike Yahoo, Facebook is a company on the rise.
- Unlike any other potential Facebook acquiror, Microsoft doesn’t need revenue, so that little problem Facebook has right now–no real business–is irrelevant.
- Unlike Yahoo, Facebook is rapidly becoming the social operating system for the web–the platform that thousands of developers build applications on top of. This fits with Microsoft’s penchant for other kinds of operating systems.
- Tons of wonderful intergration opportunities between Facebook and Outlook/Exchange, Microsoft Messenger, etc., all of which would help both companies.
- Huge captive Facebook audience in which to install Microsoft search, thus increasing Microsoft’s pathetic query share.
- Microsoft already owns 2% of Facebook and knows business well.
Yes, you say. But Zuckerberg would never sell to Microsoft.
Don’t forget that when Zuckerberg held up Microsoft for that $15 billion valuation, we were pre-Beacon. In those days, Zuckerberg was of the opinion that Beacon was the most important advertising innovation in a century, and he might well have been able to persuade a desperate Microsoft of that.
But since then:
- Beacon has flopped (at least so far),
- Social-networks are increasingly perceived as nearly worthless inventory
- Facebook’s growth is slowing
This isn’t to say that Zuckerberg WANTS to sell–just that he might be more willing to entertain the idea.
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