Microsoft invests $240 million in Facebook, valuing startup at $15B

October 25, 2007 00:05

Rapidly rising Internet star Facebook Inc. has sold a 1.6 percent stake to Microsoft Corp. for $240 million, spurning a competing offer from online search leader Google Inc. The deal announced Wednesday after several weeks of negotiation values Palo Alto-based Facebook at $15 billion - less than four years after Mark Zuckerberg started the online social networking site in his Harvard University dorm room. Microsoft also will sell Internet ads for Facebook as the site expands outside the United States, broadening an existing marketing relationship that began last year. Besides validating Zuckerberg's decision to rebuff a $1 billion takeover offer from Yahoo Inc. last year, Microsoft's money should be more than enough to pay for Facebook's ambitious expansion plans until the privately held company goes public.

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