• Reuters, Monday, November 5, 2007 11 AM

Microsoft Chief Steve Ballmer on Monday defended his firm's decision to invest $240 million for a 1.6 percent stake in Faceook. Some analysts were outspoken in their criticism of the deal, saying it put way too steep a valuation on Facebook, and that the only way the investment would be worth it is if the social network can transform itself into a central hub for Web activity.

"We didn't make a mistake," Ballmer told reporters during a conference in Mumbai. "The valuation of Facebook is still to be determined. Certainly today, it's very, very popular. So for a company like ours that wants to be a preeminent presence in this space, it's very important for us," Ballmer said. He added that it's up to Facebook to make good on its $15 billion valuation--as Microsoft, with a 1.6 percent stake, has no say over the running of the social network.

Separately, Ballmer was also asked whether Microsoft was interested in buying Yahoo, to which he gave the following interesting reply: "My answer is a considered 'no comment.' We want to succeed in the online advertising space. What happens with Yahoo, we'll all have to wait and see."

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