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Monday, August 13, 2007

Microsoft Looks at Facebook Buyout to Combat Google

Posted by @ 5:52 am

Facebook, one of the last major independent social networks, is rumored to be in the sites of Microsoft’s acquisition plans – with the magical bid figure of US$6 billion. After News Corp. picked up MySpace, and Google acquired YouTube, it was inevitable that Facebook would be swooped on by one of the major internet/tech players.

Acquiring Facebook would be a coup for Microsoft in its attempts to compete with Google. After Yahoo!’s failed attempt to make a play for the social network back in 2006, when it’s rumored US$1 billion bid was shrugged off by Facebook’s owners, the industry has been waiting for the next roll of the dice.

Back in May this year, Techcrunch raised the question, suggesting the likely suitor would be Google, considering its dazzling array of multi billion dollars acquisitions already this year. Ironically, Microsoft didn’t get a mention in the post – but take one juicy rumor about Microsoft courting Yahoo! and industry commentators suddenly have the software giant tipped as a serious acquisition contender.

So what does Facebook really offer for the likes of Microsoft or Google? Whether the rumors are true or not, the exponential growth of Facebook users, the strength of its photo sharing service (no.1 according to comScore) and the increasingly more mature user demographic (ironic considering it started as a college/student social network) make it prime pickings for a net giant without a strong community offering.

Both Google and Microsoft have their own social network ventures, Orkut and Windows Live Spaces respectively, however neither have managed to gain any real traction.

With the flurry of buzz brewing about Facebook, it’s unlikely that Microsoft (or any company for that matter) will make a successful bid at $6 billion as many analysts believe its worth at least double that figure. Considering the major internet players are happily flexing their spending power this year, expect to see Facebook lose its “independent” status sooner rather than later.

Rene LeMerle Rene is the marketing manager of - a global search engine marketing company. He also leads the marketing for - a web 2.0 style community for online and digital marketers. Rene has been in the industry since 1997 with much of that time spent helping businesses embrace the best of the internet and digital world.

View Rene LeMerle's profile

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