[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Wednesday, 24 October 2007, 21:19 GMT 22:19 UK
Microsoft buys stake in Facebook
Worker at Facebook headquarters in Palo Alto, California
Mark Zuckerberg started Facebook less than four years ago.
Microsoft has paid $240m (117m) for a 1.6% stake in Facebook that values the hugely popular social networking site at $15bn (7.3bn).

Facebook spurned an offer from Microsoft's rival Google, which was also keen to invest the site.

Microsoft will also sell internet ads for Facebook outside the United States as part of the deal that took several weeks of negotiating.

Microsoft already provides banner advertising and links on the US site.

Mark Zuckerberg started the online social networking site in his Harvard University dorm room less than four years ago.

Mr Zuckerberg, 23, has indicated he would like to hold off on an initial public offering for at least two more years.

He rebuffed a $1bn takeover offer from Yahoo last year.

Advertising magnet

Facebook hopes to become an advertising magnet by substantially increasing its current audience of nearly 50 million active users.

Facebook allows users to set up personal web pages and communicate with each other.

Google and Microsoft have crossed horns before for hot Internet properties.

Google beat Microsoft with a $1.65bn acquisition of online video sharing site YouTube last year.

Facebook expects to make a profit of $30m this year so on conventional valuations a $15bn price tag would look expensive.

VIDEO AND AUDIO NEWS
Facebook founder talks about the site's success



SEE ALSO
Microsoft 'mulls Facebook stake'
24 Sep 07 |  Business
Cash reward for Facebook programs
18 Sep 07 |  Technology
Facebook dismisses privacy fears
12 Sep 07 |  Technology
Facebook 'costs businesses dear'
11 Sep 07 |  Technology
Facebook opens profiles to public
06 Sep 07 |  Technology

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific