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BREAKING: Microsoft Acquires 2 Percent Stake in Facebook for $240 Million
Lots of stuff to analyze here, but in a rush…heading out to ClickZ’s 10-Year Anniversary Dinner and Awards Ceremony.
Here are the details, from Facebook’s release (interesting…no Zuckerberg quote):
Facebook and Microsoft Expand Strategic Alliance
Two companies expand advertising deal to cover international markets, Microsoft to take equity stake in Facebook
PALO ALTO, Calif., and REDMOND, Wash. — Oct. 24, 2007 — Facebook and Microsoft Corp. today announced that the two companies would expand their advertising partnership and that Microsoft will take a $240 million equity stake in Facebook’s next round of financing at a $15 billion valuation. Under the expanded strategic alliance, Microsoft will be the exclusive third-party advertising platform partner for Facebook, and will begin to sell advertising for Facebook internationally in addition to the United States.
“We are pleased to take our Microsoft partnership to the next level,” said Owen Van Natta, Chief Revenue Officer, Facebook. “We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to nearly 50 million active users of Facebook.”
“Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only for our two companies, but also our collective users and advertisers,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership.”
Facebook continues to experience strong growth both in the U.S. and international markets; almost 60 percent of Facebook’s users are outside the U.S. With an average of 200,000 new users registering each day, Facebook continues to be one of the most-trafficked sites on the Internet.
On Aug. 22, 2006, the companies announced a U.S.-only strategic alliance that named Microsoft the exclusive provider of standard banner advertising on Facebook using Microsoft’s digital advertising solutions and the Microsoft® adCenter platform. In early 2007, the terms were extended to 2011.
About Facebook
Founded in February 2004, Facebook is a social utility that helps people communicate more efficiently with their friends, family and coworkers. The company develops technologies that facilitate the sharing of information through the social graph, the digital mapping of people’s real-world social connections. Anyone can sign up for Facebook and interact with the people they know in a trusted environment. Facebook is a part of millions of people’s lives and half of the users return daily. Facebook is a privately-held company and is headquartered in Palo Alto, Calif.
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Disney Buys ClubPenguin
My head’s exploding.
So Disney, who is one of those companies that actually hasn’t been handing out money to independently-owned/VC-backed web properties lately has purchased hot kids’ virtual world/social networking site ClubPenguin.
Great fit. Probably a better virtual world than the one they launched themselves.
Here’s an open letter from the founders of ClubPenguin about the deal.
Now it’s up to Disney Online to figure out how to continue to monetize the property through integrated ad offerings (Club Penguin was doing a pretty good job, operating at a 50% profit margin).
Treehugger Acquired by Discovery
I really don’t want this blog to be about acquisitions and venture capitalists and deals and the like, but damn, if media consolidation isn’t interesting.
In this case, Discovery Communications (yes, the Discovery Channel’s parent company) has acquired Treehugger, one of the leading eco-blogs, for $15 million + earn-outs. Treehugger’s got 1.4 million monthly unique visitors which is about to get a serious (bio-diesel) turbo charge from Discovery’s PlanetGreen Network.
In case you haven’t noticed, media companies are buying and starting blogs. Blogs can be really formidable media properties, people, and don’t you forget it.
Lionsgate Acquires 42% of Break.com for $21 Million
Lionsgate acquired 42% of Break.com for $21 Million in stock, according to Variety. Lionsgate has been working with Break.com for a while now on some very successful promotions (including SAW II). What makes Break.com different than many other video distribution sites is that they own their content. They not only have a library of content, but they’ve recently inked deals to produce content as well. Lionsgate is no stranger to both of those areas, and this could lead to big things from Break.com away from the small screen, and it means better distribution for Lionsgate promotional content, which is typically aimed squarely at M 17-24, Break’s core.
On a more personal note, congratulations to Keith Richman, Break.com’s CEO. For those of you unfamiliar with Keith, he’s truly been a visionary thinker in this business and has evolved Break.com first into a big player in the video space, then, even more importantly, into an industry stalwart. I consider him a good friend, and wish him only the best.
It’s a long way from big-boys.com.
MySpace buying Photobucket???(!!!)
According to various reports, MySpace is acquiring Photobucket, the #1 site for hosting images on the web.
MySpace has repeatedly shut down users’ access to Photobucket embedded apps throughout the network, but now it seems that MySpace is betting around $300 million that its something they need to own, not just let mooch off its success.
Full Disclosure: Deep Focus was the first agency to advertise on Photobucket’s homepage.
**UPDATE**
Apparently, this is confirmed. The price is about $250 million.
It IS GoogleClick!
It’s official. As I speculated earlier, Google has purchased DoubleClick for $3.1 BILLION. The NY Times reports on the deal here.
This is arguably one of the most important acquisitions in the history of online media. Although this was akin to the Yankees overpaying for a pitcher (DoubleClick) to keep him out of the Red Sox’s (Microsoft’s) hands, it is still a very strategic fit. The combination of Google Analytics with DoubleClick’s best-of-breed ad tracking, Google’s search ad bidding system with DoubleClick’s display ad bidding system, Google’s video prowess (YouTube) with DoubleClick’s video prowess (Motif/Klipmart) should be enough to make competitors (Atlas, 24/7) shake in their e-boots.
I’ll continue to explore the synergies and potential pitfalls of this deal as it happens.
Endemol Produces for Break.com
Variety reports that the “Deal or No Deal” producer has signed a deal to create original programming for Break.com.
Break.com is an interesting site. It stands out because it is completely editorially curated, as opposed to a democratically user-curated repository of endless content (like a YouTube or Metacafe). Whereas many traditional, professional content creators and producers choose mega-outlets like Yahoo, MSN, or AOL to act as distribution platforms, Endemol apparently has chosen Break.com for its ability to distribute content to a targeted, highly concentrated audience of young males.
The fact that Break.com can even make a deal like this should serve as an example of the power shift that is happening throughout all kinds of media. While mass media like television can certainly be the “needle mover” that it always has been, more targeted, niche media continues to earn a bigger seat at the table. This has been evident for years in the growth of cable programming and cable networks, and it’s being made evident online as well. Niche communities, blogs, social networks, and yes, even video websites are delivering audiences not only via their own properties, but through decentralized distribution. The linking culture of the internet is making content infinitely portable, shareable, promotable, and more easily consumable than ever.
Could Doubleclick’s Sale Hurt Their Publisher Relationships?
Great, insightful piece by Kate Kaye in today’s ClickZ regarding the fallout of a potential acquisition by Microsoft.
While I do understand analysts concerns, the fact of the matter is that AOL still most of their work on Windows PCs. On the other hand, I guess that doesn’t mean that Microsoft knows all the details of AOL’s ad serving and inventory.
But these companies always find a way to work together. Google powers search on lots of sites that could technically be considered competitors. Why? Economies of scale. It’s beneficial for both parties. This is an ecosystem that can support co-existence. But then again, maybe not heightened levels of testosterone. Guess we’ll have to see how this one plays out.
