Much ado about Facebook
Right in the middle of the top half of the front page of today’s Wall Street Journal is a story, Microsoft Fires Volley At Google in Ad Battle. The story begins with the somewhat breathless line:
The battle of titans between Microsoft Corp. and Google Inc. over the future of the Internet is about to get even hotter.
The story is about Microsoft’s possible interest in buying a piece of the social-networking site Facebook and Microsoft’s battle for online advertising. The article continues:
Microsoft’s Internet thrust is fueled by concerns among its executives that the maturing tech company isn’t moving quickly enough to establish a broad beachhead in the online-advertising world, say people familiar with the company. Along with Google, Time Warner Inc.’s America Online unit, Yahoo Inc. and others, Microsoft is racing to establish what’s known in technology circles as a “platform” — in this case a single system through which advertisers can buy ads that appear on a multitude of sites and Web publishers can tap for ads to appear on their sites. That approach has taken on added importance as users and advertisers increasingly spend time and dollars on sites other than the big, established Web portals.
But it’s about more than just advertising dollars; according to the story, it’s about control of the Internet:
Some industry executives believe the Internet today is facing the sort of turning point that the computer-operating-system sector confronted two decades ago: Whoever controls the technology platform for buying and selling online ads could hold tremendous power over the Internet industry for years to come — much as Microsoft was able to use its Windows operating system to shape the personal computer.
At the Wall Street Journal blog site, All Things Digital, Kara Swisher throws cold water on the Facebook valuations being bandied about:
Tally: Microsoft has to be seriously desperate to be considering this much of an investment for so little, even with its bags of cash to spend. While I like big, bold and even addled moves as much as the next person, this one is a doozie.
That said, there is always another fool in line to pass on the buck. A sky-rocketing IPO could wipe clean this round of insanity.
But that does not take away the fact that Facebook is not worth this ridiculous price now. It might be in time, or it might not.
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