Microsoft Joining Facebook = Megatron

So in the news is that Microsoft wants to buy 5% of Facebook. 5% might not seem like much to you, until you take into account that Microsoft has valued Facebook at a net book value of $10 billion. Yes, that's not a typo. Five percent of that would be an astonishing $500 million.

Is it worth it? I guess it is. Even though I'm not the biggest fan of Facebook, I have to admit it has a lot of people on there who go on atleast once a week, and even more for the college crowd. People who never even got into social communities are even logging into Facebook just so they can tell people they have an account.

The advantage of these online communities is that once a person registers, they are more likely to stay than compared to other websites where users feel little sense of commitment to them. For advertising purposes, Facebook could probably make billions.

I still find that amount to be ridiculously high. Facebook turned down a $1 billion buy-out from Yahoo last year. This happened right after Google purchased Youtube for $1.6 billion.

The problem with Facebook is that I think it will always target a very young crowd. People will not grow old with it. Teens and young adults like to occupy their time chatting back and forth, but I find that older people are too busy with their lives and raising kids and getting their mortgages paid that it becomes to cumbersome to log on to see what your friends are doing this weekend.

Personally, if I was Bill Gates (ha!) I would use his billions of dollars to try to beat Facebook at their own game. All you'd have to do is start a similar community and attach it with Hotmail or MSN. He would certainly have enough capital, but I get the sense that in his older years, he's less competitive, willing to give away much of his money to 3rd world countries. I guess when you can buy everything and have that much power, you start to reflect on how you can give it all back to the under-priveledged. Kudos for that.