Microsoft To Buy Facebook For $6 Billion?
Rumor is that Microsoft is looking to close a deal to buy Facebook for the amazing sum of six billion dollars. Henry Blodget says that while he can't confirm it, he has definitely heard that Steve Ballmer is desperately trying to make a big splash play …
Context & Ripple Effects
Henry Blodget reports hearing that Steve Ballmer is pushing hard on a $6 billion buyout of Facebook — though both he and John Battelle, who published his own skeptical 'nah' the same day, treat the number as unconfirmed. The rumor lands just a year after Facebook turned down Yahoo's $1 billion offer, so any serious bid starts at a multiple of the price Mark Zuckerberg already refused.
The timing is pointed: Facebook has just opened its platform to thousands of third-party applications, and TechMeme chatter argues its advertising isn't yet working — meaning a $6 billion price would pay for audience and platform position rather than proven revenue.
First-order effects
- If Ballmer is pursuing the deal as Blodget heard, Microsoft is choosing to buy, rather than partner with, the fastest-growing social platform — directly answering its own admitted gap in consumer web services alongside its confirmed 'Cloud OS' developer push.
- Facebook faces an immediate decision point: having rejected Yahoo's $1 billion in 2006, its founders would have to accept a sixfold jump in valuation to sell, or publicly recommit to independence.
Second-order effects
- A Microsoft-owned Facebook would force Google and other portal-era incumbents to respond defensively on social networking, since the largest social graph would sit inside a rival's ad stack.
- The rumored size itself moves the market: even unconfirmed, a $6 billion figure resets asking prices for every social network and application-platform company built on the model Facebook just proved out.
Third-order effects
- If the pattern holds — incumbents bidding billions for young platforms whose monetization is still unproven — control of user platforms becomes the consolidation battleground of the consumer web, with independent social companies increasingly priced as acquisition targets rather than standalone businesses.
The trend: The large internet incumbents are moving from building social products to bidding for them, with platform-stage startups like Facebook becoming multi-billion-dollar takeover targets.