• Silicon Alley Insider, Thursday, October 25, 2007 10:47 AM

Much of the attention this morning is on Microsoft's $240 million investment in Facebook, a deal that gives the software giant two things: a 1.6% stake in the company and the right to sell international remnant advertising. That's right, "remnant" as in leftovers; those ads Facebook doesn't want to sell itself.

In fact, most industry pundits agree that Microsoft didn't win very much at all at the end of the day. The company invested $240 million for a crumb of equity (1.6%) and a sales-repping job for a company that now appears to be obligated only to treat Microsoft like any tiny minority investor (i.e., send them some financial info once a quarter).

Indeed, for a company that has $23.4 billion in cash, a $240 million investment for a 1.6% is hardly noteworthy. "Microsoft sneezes that much up in day," Sanford C. Bernstein analyst Charles Di Bona told Business Week (link: http://www.businessweek.com/technology/content/oct2007/tc20071024_654439.htm?chan=technology_technology+index+page_top+stories ). Of course the real winner, in what amounted to little more than an image arms race between Google and Microsoft, is Facebook.

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