Microsoft and Facebook: The $240 million poke

The two companies confirm their partnership, with Microsoft taking a $240 million stake in Facebook as well as gaining the right to sell ads for Facebook internationally.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried

It's official. Facebook decided to ignore the friend request from Google and instead clicked "OK" to one from Microsoft.

The deal, reported first in this spot earlier Wednesday, gives Microsoft a much-needed win against its Silicon Valley search rival. As noted over at Caroline McCarthy's blog, The Social, Microsoft is paying $240 million for a stake in Facebook, in a deal that values the social networking company at $15 billion. That's at the high end of what had been rumored.

Under the deal, Microsoft will also get an expanded role in Facebook's ad sales, becoming "the exclusive third-party advertising platform partner for Facebook," and also beginning to sell ads internationally. The two companies' prior deal covered only banner ads and only in the U.S.

So how important is the deal for Microsoft? Piper Jaffray analyst Gene Munster put it this way earlier Wednesday. "They've been beaten by Google since the beginning of time," Munster said. "They may want to make a statement that they aren't going to sit on the sidelines."

Well, it's definitely a statement. Let's see what Wall Street and the industry make of that statement. A conference call with analysts is due to start shortly.