Perspective: Facebook Is Now 5th Most Valuable U.S. Internet Company

"...and a massive stock valuation. They can make acquisitions of key technology and talent without spending much."

I don't agree with this. There's no liquidity in the stock, and just because MSFT thinks the company should be valued at $15B, I don't see why I should, or should expect anyone else to.

Wouldn't a $15B valuation make their (newly-issued) stock options _less_ attractive to new employees, since they would only be in-the-money if Facebook IPO'd with a (kinda high) $15B valuation by the public markets?

It's a bit of a different question for acquisitions, in which they can trade stock outright. Still, to do a deal, it seems they'll have to buy at very high valuations, giving their own highly-valued stock out in return. So it should still cost them (about) the same %age of FB to acquire a company post- and pre-investment.

It's certainly not _bad_ to raise a quarter-billion dollars in exchange for 1.6% of the company, but I don't see how this makes their stock much more valuable to an independent observer; without liquidity, it's still anyone's guess. Granted, people will probably guess higher now, but I still don't see that valuation as a free ride to low expenses.

I don't think it makes sense to apply "total_valuation = microsoft_price / microsoft_stake". There are a load of wishy-washy things Microsoft could be looking to get out of this - a seat on the board, knowledge, position, credibility, yada yada... I doubt they're in it to make a direct return on their $240 million investment. You could probably add or subtract $100,000,000 or 1% from the figures involved and it wouldn't affect whatever Microsoft's trying to do.