Microsoft outplayed (or at least outbid) Google for a chunk of the budding social network empire Facebook, but what are their motives? Of course, Microsoft already had a relationship with Facebook, so the outcome couldn’t have been too much of a surprise or be seen as a big defeat for Google. But the fact that Google didn’t win the media-hyped sweepstakes is interesting, if only for the fact that Google hasn’t come in second in anything in a long while.
But what is Microsoft’s play? Is Facebook really worth $15B, nearly 30-times what News Corp. paid for MySpace? Does the FB valuation even mean anything to Microsoft?
Tim Dyson, the CEO of PR holding company NextFifteen, wondered this week why Bill Gates’ company would take such a small stake. He sees the move as a defensive front that blocked Google from further control over Internet advertising, rather than a bid for control of FB. [Outcast Communications, which works for Facebook, is part of Dyson’s NextFifteen group.] Dyson thinks Google should be worried about the FB phenomenon:
If I were Google I'd be a bit scared by this. My generation has got used to Google. We go there and we search. We don't do much else with Google though. The Gen Fs do a LOT more with Facebook and they spend hours there. Who's to say they can't create a search engine with Facebook user recommendations helping guide the results of that search?
Andy Beal of Marketing Pilgrim said Google shouldn’t fret. He saw the showdown as a must-win and successful move on offense for Microsoft because all of the buzzwords associated with social networks “cool, exciting, trendy places to hang out at” – don’t usually fall into sentences discussing Microsoft. Google, on the other hand, says Beal, can take the few hundred-million it just saved and build its own social network that will be likely be anticipated, fawned over and embraced, because that’s just what Google does.