Search engines buy into Facebook

01/10/2007

Microsoft beat interests from Google and Yahoo! to land a $240 million dollar (1.6%) equity stake that puts the value of the social platform at $15 billion. Today we learnt that 2 hedge funds have both stepped with $250 million each at the same valuation as Microsoft.blogs.forbes.com/meetblog/2007/10/facebook-making.html

Mark Zuckerberg (the founder of Facebook) was in talks with all three search engines as he looked for significant investment to take Facebook to the next level. Whilst this injection of cash promises to improve what is already a highly addictive and meaningful user experience (the average user visits 40 pages per session), this will compromise the independence Zuckerberg has fought so hard to maintain. http://kara.allthingsd.com/20071011/update-of-facebook-funding-update-googles-hail-mary-pass/)

Facebook's meteoric rise has rattled the cage of all the major search engines over the past few months as the social platform is increasingly becoming the first point of call on the internet journey. As things stand it is very possible that in the near future "virtual socialising" will replace search as the primary reason for people being online. This change in user behaviour does represent a challenge to the billions of dollars of ad revenue the search engines have enjoyed over the last few years.

Back to i-level Search News October 2007