Microsoft just announced that they signed a definitive agreement to take a stake in Facebook for $240M. A complete acquisition of Facebook by Microsoft is being valued at $15B, with a "B".
Facebook is reported to have revenues of $150M and profits of $30M. That means that Microsoft is paying 100 times sales. Madness.
The other company bidding for Facebook was Google. I suspect that Google would have been glad to acquire Facebook for a reasonable price but instead probably bid up the company to force Microsoft to pay top dollar.
Is there a wisp of desperation in the air as Microsoft trys to be "cool" and relevant to the younger generation, a position that was long ago lost to the the likes of Apple and Google?
Disclosure: at the time of this posting the author was long MSFT, APPL and GOOG.
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