Posted on 10/24/2007 4:36:08 PM PDT by shrinkermd
Edited on 10/24/2007 6:39:02 PM PDT by Admin Moderator. [history]
SAN FRANCISCO -- Microsoft Corp. agreed to invest $240 million for a 1.6% stake in Facebook Inc. that values the social-networking site at $15 billion, beating Google Inc. in a closely watched contest.
As part of the deal, the two companies expanded their existing advertising agreement. Microsoft, which previously handled Facebook's U.S. ad sales, will now also sell the site's international advertising.
(Excerpt) Read more at moneyweb.co.za ...
What don't I understand here?
It's a simple equation:
Fool+Money=Soon Parted
Is that fads are worth more money than hard assets. The American economy is made up of thin air that investors buy. In the meantime our manufacturing is moving to China and other places so they can build tanks and planes. We will then defend the country by th rowing used Dvd’s at them as high velocity lethal frisbees. :-)
Suppose it was 1903 and you had an extra $2000 bucks burning a hole in your pocket. You had an inklin that this guy Henry might be onto something. You buy a stake in his company hoping that for the next 100+ years it would grow into a company worth 18 billion thus securing a future revenue stream. Do you do it?
Well, in retrospect, of course you do. That’s what these guys are after. I deal with enough executive levels folks that they don’t care so much if we’re having a good year. They’re worried about 5-10 years from now.
MS and Google have a huge warchest. Using a little chunk of it for the next Ford...worth the gamble, to them anyway.
Facebook doesn’t have signifant unfunded liabilities from several hundred thousand retired union members and another 100K+ existing union members with hourly wage cost of ~75/hr counting benefits. Plus, the advertising market online is BOOMING. Just look at Google’s earnings last quarter vs when it first went public.
After several years of fascination with the Internet, I've returned to reading books.
I still check into a few websites everyday to get the latest news and weather. And once in a while I'll use it to buy something that my neighborhood stores don't carry. But not much else.
And I am very happy to be reading books again.
Cash burns a hole in your pocket.
You’re the exception not the rule (for better or worse).
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