Tech Town, NC

Microsoft pulled the trigger on a smaller than rumored investment in Facebook today to the tune of $240 million. What will 240 million buy in this bubble-ish world? A measly 1.6 percent, that’s what! That puts the valuation of Facebook at $15 billion, which is quite a vote of confidence. If it wasn’t already past time to compare Facebook to the ill-fated Friendster, let the analogy be forever laid to rest.

Blogging Stocks has a good back of the envelope analysis of the valuation that makes 15 billion look like a bit of a stretch (if it didn’t already). The stock market values Google’s revenue at about twice as highly as Microsoft’s because Google has shown itself to be more of a growth company in the last 5 years. But if Google is the Grand Overlord of growth, and Facebook revenues are being valued at SEVEN TIMES those of Google, then Facebook must be the Supreme Flying Spaghetti Monster God of Growth.

To be fair, Google experienced Spaghetti Monster-like growth when it was a smaller company, so it is possible. Now it’s a full fledged Xenu and has revenues as reliable as the Church of Scientology to boot.

So what will they do with all that Microsoft moolah? The official line is something like this:
“Continue to fund innovation and growth. Expanding our employee base; more developers. We’ll end the year at over 700 employees. Doubling user base every 6 months, with strong growth in international markets.”

That all sounds well and good as far as business-speak goes, but let’s hear something juicy. Are they going to acquire some app factories? Buy their own dark fiber? Build a Facebook-plex and put in a wave pool?

As Facebook ramps up its revenue we’ll find out if it, like the Spaghetti Monster, is just a parody of something larger, or if it can sustain itself and become the next Xenu.