Like a dementor from a Harry Potter book, an embrace and kiss from Microsoft is usually all that’s needed to extinguish the hope, excitement and joy in a potential acquisition. This time, its Facebook’s turn it seems:

14:40 EDT MSFT theflyonthewall.com: Microsoft-MSFT in talks about investment in Facebook, according to sources-WSJ

14:41 EDT MSFT theflyonthewall.com:  Microsoft-MSFT investment would value Facebook at $10B or more-WSJ :theflyonthewall.com

Watch Microsoft wreck yet another acquisition. Hasta la vista Facebook, your time has been and gone. And good riddance.

(PS - am I the only person in the world who finds something almost abhorrent and distasteful about Facebook? I really really dislike its entire culture and ethos )

Looks like they’re interested in just buying a small stake which would no doubt come with massive strings attached.

14:48   MSFT Microsoft: Follow-up on WSJ story about MSFT Facebook investment at 14:40 (29.44 +0.79)  -Update-

WSJ reports the co is in talks with Facebook about making an investment in the social-networking startup that could value Facebook at $10 bln or more, people familiar with the matter said. The talks set up another likely faceoff between tech titans: Google (GOOG) has also expressed strong interest in a possible Facebook investment, said people familiar with the matter. MSFT’s approach to Facebook in recent weeks with proposals to invest in the fast-growing site is part of the software giant’s effort to catch up with the Internet rival Google. If successful, MSFT’s talks with Facebook could give it an up-to-5% stake in the closely-held startup-a stake potentially valued at roughly $300 mln to $500 mln, the people familiar with those talks said. The people familiar with the matter said that the discussions are still preliminary and Facebook could wind up not taking an investment from either MSFT or GOOG. Factors in the discussions include the valuation the suitors would offer to Facebook and other business considerations they could contribute to sweeten any deal.

I see several potential strings attached:

1. “Browser standardization” favoring IE.

2. “Instant messaging optimization” integrating MS Instant Messenger exclusively with the Facebook web pages.

3. Some sort of lame “squirting” of files between Facebook pages and Zunes.

I want to stop thinking about this now before I throw up.  It just gets worse from here.

The whole thing would be DOA and quickly rotting.

Re: Facebook Getting "kiss of death" from MSFT

[quote author=“Tommo_UK”](PS - am I the only person in the world who finds something almost abhorrent and distasteful about Facebook? I really really dislike its entire culture and ethos )

While I am not a big fan of social networking sites in general, Facebook is about the best I’ve seen. I find it much more palatable than MySpace, anyway.

It’s sad, really. An empire without a cause, just cash to try and buy ingenuity and creativity.

Re: Facebook Getting "kiss of death" from MSFT

[quote author=“Tommo_UK”](PS - am I the only person in the world who finds something almost abhorrent and distasteful about Facebook? I really really dislike its entire culture and ethos )

Apparently, a few million people disagree with you, Tommo. One of the multitude of advantages of the “information revolution” is that you can choose NOT to participate in something you find distasteful. Facebook appears to be mostly for college-age folks, while MySpace seems aimed at teens (and younger). When one signs up for Facebook, one is asked for an affiliation, primarily college. I belong to the MIT group, for example.

Several of the young people I teach—or have taught—in 4-H are avid users of MySpace. One is spending a year in Costa Rica. Her MySpace page is an easy way for her to send photos and text to her friends back home in Oregon (and other places). She doesn’t need to know anything about HTML websites and doesn’t need to get a domain name nor any software other than her browser. She can (and does) restrict access to her full MySpace page to specific people. She can view her friends’ pages to keep up with them. They can communicate through messages on the page, as well as email. She cannot send pictures via email, as some of her friends have accounts that their parents have set to reject all attachments.

Just what is the “ethos” that you dislike so?

glusher, I’m not anti social networking sites. FWIW, although I didn’t mention My Space earlier, I dislike it because its so horribly dated and tacky. More to the point, I dislike Facebook because I find something unpleasantly superficial about the casualness with which it defines friendship and the almost-predatory and sensationalistic nature of its approach to portraying popularity and social ranking.

Let me emphasis again, I’m not anti networking sites - far from it. At its best, Facebook is fantastic, but at its worst and lurking under the surface I just find there to be something very unpleasant about it, a sort of Animal Farm meets Lord of the Flies.

A bit more info on this.

08:45   MSFT Microsoft: NY Post talks about potential Facebook acquisition and Yahoo (29.08 )

NY Post reports the co needs to do a deal - the question the software giant is currently contemplating is whether it should do one with Facebook or YHOO, The Post has learned. Two sources said that internally MSFT has been debating for months whether it should go public with the takeover proposal it made for YHOO earlier this year in an attempt to prod shareholders to force mgmt to the bargaining table. Both sources agree, however, that despite its $21 bln of cash on hand, Microsoft’s board doesn’t have the appetite to do three multibln-dollar deals in one year. While YHOO is complementary to MSFT, Facebook would provide entry into the fast-growing social network world that is a weak spot for the software giant. Facebook would also allow Microsoft to use its technology unencumbered, while Yahoo would raise questions of whose technology to keep versus whose to jettison. Facebook is also more in line with Microsoft’s “partnering” method of business. But, not unlike Yahoo, Facebook has so far resisted any overtures to sell out. That’s why Microsoft is talking with the Web site about an infusion of $500 mln cash in return for a 5% stake. Sources cautioned, however, that the most recent round of talks between Microsoft and Facebook could fall apart, which is one reason why Microsoft hasn’t abandoned going public with its Yahoo offer.

MSFT really is up $hit creek. Its a company bankrupt and devoid of ideas desperately throwing money at anything and everything in the hope that some of it will eventually stick. Watching the company flounder around trying to get its various pathetic online and consumer-oriented product lines profitable and appealing is sad and reminds me of a beached whale collapsing and dying under its own weight,  stinking and rotting on the beach. I have no doubt that the true price of MSFT’s investment in Facebook, if it happens, will be the destruction of the site, slowly but surely suffocated under its death-like quashing of innovation and excitement. Frankly, the thought of rich fat boring dead-weight Microsoft gatecrashing the cool, hip Facebook party should be enough to drive anyone away.. and into the arms of the latest social networking site du jour, whatever it might be in the future.

And is Facebook really worth ten billion Dollars?

[quote author=“Tommo_UK”]A bit more info on this.

MSFT really is up $hit creek. Its a company bankrupt and devoid of ideas desperately throwing money at anything and everything in the hope that some of it will eventually stick. Watching the company flounder around trying to get its various pathetic online and consumer-oriented product lines profitable and appealing is sad and reminds me of a beached whale collapsing and dying under its own weight,  stinking and rotting on the beach. I have no doubt that the true price of MSFT’s investment in Facebook, if it happens, will be the destruction of the site, slowly but surely suffocated under its death-like quashing of innovation and excitement. Frankly, the thought of rich fat boring dead-weight Microsoft gatecrashing the cool, hip Facebook party should be enough to drive anyone away.. and into the arms of the latest social networking site du jour, whatever it might be in the future.

And is Facebook really worth ten billion Dollars?

Was Apple worth $150 million that Microsoft pumped into it when Steve Jobs came back on board? Tommo, the pure vitrol and angst that you display in regards to anything Microsoft does or contemplates is sickening. It shows a pathological need for Microsoft to fail, and Apple’s success is just another vehicle for you to ride in your hate fest of Microsoft. Microsoft owns stakes in hundreds of companies, this is just another investment in a company that they view as giving them a chance at a good return on their investment. 5% isn’t controling interest, it’s an investment to make money. Now as far as investments go, I find anything that is based solely in the internet to be ridiculous to spend your money on, much in the same way I found the first .com bubble to be ridiculous and had anticpated the pop for years before it happened (everyone seemed to forget that the .com’s were merely penny stocks and convinced themselves that the internet quantified a new paradigm, when in reality, it was just business as usual).

But regardless of the viability of Microsoft’s investment strategy, you’re analysis of Microsoft leaves me doubtful of your capability to recognize anything of value that Microsoft develops, greatly reducing your reliabilty as an analyst in my opinion. It’s easy to say a company is dead, look at the amount of death announcements for Apple.

[quote author=“daemon”]
But regardless of the viability of Microsoft’s investment strategy, you’re analysis of Microsoft leaves me doubtful of your capability to recognize anything of value that Microsoft develops, greatly reducing your reliabilty as an analyst in my opinion. It’s easy to say a company is dead, look at the amount of death announcements for Apple.

daemon, flame bait. Not rising to it. Cook your own sausages. History’s proven me right so far.

daemon,

I think the market (excluding those who try to pump and dump) has spoken loud and clear regarding MSFT.  Just look at the stock price for the last five years.  Having money in MSFT the last few years is worse than just putting it in money market.  MSFT has not done anything to grow the company, and the latest products: Vista and Office 2007, has received less than enthusiastic reception, to put it mildly.  Where is the growth?

Trying to buy into Facebook is just another attempt to buy innovation instead of creating it.

I am with Tommo on this one.

[quote author=“oldmac”]daemon,

I think the market (excluding those who try to pump and dump) has spoken loud and clear regarding MSFT.  Just look at the stock price for the last five years.  Having money in MSFT the last few years is worse than just putting it in money market.  MSFT has not done anything to grow the company, and the latest products: Vista and Office 2007, has received less than enthusiastic reception, to put it mildly.  Where is the growth?

Trying to buy into Facebook is just another attempt to buy innovation instead of creating it.

I am with Tommo on this one.

Yes, because the stock market decides what is innovation what isn’t innovation based on how well the stock does compared to money market accounts.

I can’t believe that you think that market valuation of a company’s stock has anything to do with their capability to innovate new products. High stock prices do not equate to high innovation (btw, how the hell do you create innovation, it’s the action of retasking exsisting technology for a different problem). And you’re parting comment leaves me puzzled since first, it’s an investment, not a buy-out, and second your tone gives it the implication that purchasing companies that make new products outside of the purchaser’s current portfolio is somehow lowbrow, as if no other company would stoop to such lows. Perhaps you could name a single company that is famous for it’s innovation that has never once purchased another company, and has been in business for say 30+ years.

daemon, the point is that Microsoft has a history of stifling the very innovation it tries to buy-in through its acquisitions, thus destroying the value it was trying to buy in the process. It isn’t that there’s anything wrong with acquisitions. Its just that Microsoft doesn’t do it very well, and in the absence of being able to invent anything itself which actually makes money (witness the XBox and the Zune), can rightly be called a creative desert.

[quote author=“Tommo_UK”]daemon, the point is that Microsoft has a history of stifling the very innovation it tries to buy-in through its acquisitions, thus destroying the value it was trying to buy in the process. It isn’t that there’s anything wrong with acquisitions. Its just that Microsoft doesn’t do it very well, and in the absence of being able to invent anything itself which actually makes money (witness the XBox and the Zune), can rightly be called a creative desert.

I think it’s fair to say that MSFT is not alone in that it buys a good share of innovation, and also creates some. The problem, IMO, is in the fact that they have *no* vision. They don’t know what to do with the technology they work on - there’s no “Steve Jobs” or “Jonathan Ive” equivalents there. Great technology is just that, great technology. It’s nothing if it doesn’t become a great product.

HAB

[quote author=“Tommo_UK”]A bit more info on this.

08:45   MSFT Microsoft: NY Post talks about potential Facebook acquisition and Yahoo (29.08 )

NY Post reports the co needs to do a deal - the question the software giant is currently contemplating is whether it should do one with Facebook or YHOO, The Post has learned. Two sources said that internally MSFT has been debating for months whether it should go public with the takeover proposal it made for YHOO earlier this year in an attempt to prod shareholders to force mgmt to the bargaining table. Both sources agree, however, that despite its $21 bln of cash on hand, Microsoft’s board doesn’t have the appetite to do three multibln-dollar deals in one year. While YHOO is complementary to MSFT, Facebook would provide entry into the fast-growing social network world that is a weak spot for the software giant. Facebook would also allow Microsoft to use its technology unencumbered, while Yahoo would raise questions of whose technology to keep versus whose to jettison. Facebook is also more in line with Microsoft’s “partnering” method of business. But, not unlike Yahoo, Facebook has so far resisted any overtures to sell out. That’s why Microsoft is talking with the Web site about an infusion of $500 mln cash in return for a 5% stake. Sources cautioned, however, that the most recent round of talks between Microsoft and Facebook could fall apart, which is one reason why Microsoft hasn’t abandoned going public with its Yahoo offer.

MSFT really is up $hit creek. Its a company bankrupt and devoid of ideas desperately throwing money at anything and everything in the hope that some of it will eventually stick. Watching the company flounder around trying to get its various pathetic online and consumer-oriented product lines profitable and appealing is sad and reminds me of a beached whale collapsing and dying under its own weight,  stinking and rotting on the beach. I have no doubt that the true price of MSFT’s investment in Facebook, if it happens, will be the destruction of the site, slowly but surely suffocated under its death-like quashing of innovation and excitement. Frankly, the thought of rich fat boring dead-weight Microsoft gatecrashing the cool, hip Facebook party should be enough to drive anyone away.. and into the arms of the latest social networking site du jour, whatever it might be in the future.

And is Facebook really worth ten billion Dollars?

Exactly on target, Tommo!  Most folks don’t understand that Microsoft is already dead.

[quote author=“daemon”]

Yes, because the stock market decides what is innovation what isn’t innovation based on how well the stock does compared to money market accounts.

Nonsense.  The stock market values companies on existing sales, and potential new sales, which are based on consumer acceptance of new products (otherwise known as successful innovation).

[quote author=“daemon”]

I can’t believe that you think that market valuation of a company’s stock has anything to do with their capability to innovate new products. High stock prices do not equate to high innovation…

Nonsense once again.  The stock market is about predicting the future, not quantifying the past.  Even rumors of innovative new products drive stock prices.