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Google, Microsoft Fight For Facebook Stake

A major investment in the social network Facebook will be announced in the next day or two, the only question is who the lucky winner will be: Microsoft or Google. The Post expects the search king to walk away with the lucrative stake, worth between 5% and 10% of the social network. As it has in previous deals, Google...has been trying to drive the price up to a point that would scare away Microsoft. But the software giant won't scare easy. One source says Microsoft is "willing to give any valuation possible" to keep Google from winning this one.

The stakes for a seat on the Facebook board are high. The social network has a massive and growing loyal audience, with huge ad potential. Next week, Facebeook is expected to unveil a new behavioral advertising program, possibly in conjunction with the investment. If Google outbids Microsoft, you can expect Microsoft's ad serving deal with Facebook to dissolve soon thereafter, most likely replaced with Google Search and some iteration of AdSense.

Of course the biggest winner in all this is Facebook; investors value the company at close to $15 billion, which means that Google and Microsoft are looking at an astronomical $1.5 billion for a 10% stake or $750 million for a 5% stake -- incredible money for a company set to pull in just $150 million this year.

Read the whole story at New York Post »

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