Did Google really trick Microsoft?

Microsoft finally bought a stake of 1.6% in Facebook for $240 million taking the worth of facebook to $15 billion. Some say Google tricked Microsoft in the deal. Did Google really trick Microsoft in this or is it just that there are many Google admirers who over speculate Google’s strategies? After all Microsoft is not run by a bunch of idiots!

The launch of OpenSocial, a common API platform for an array of Social networks, in just a week after Microsoft bought a stake in Facebook upholds ‘Google tricked Microsoft’ story. I’d like to explore the flip side.

­

Microsoft had earlier bid for 5% stake, still over priced, for net worth of Facebook to $10billion. But they just bought 1.6% in the end. Why could they have done that? Why not buy 5% or more?

With a small stake in facebook, for an exorbitant price, Microsoft could keep off other interested parties like Cisco, and Yahoo. Remember Yahoo had bid for facebook at $1.6 billion sometime last year, and was turned down by Zuckerberg? If you are wondering what’s Cisco has got to do with social networking, you will be surprised to know that Cisco recently bought a social networking company based in San Francisco.

Yahoo is losing out it’s dominance in the Internet to social networking without facebook or any other new features in the horizon, also with its shares going down it shows signs of being acquired by some company in future, this could as well be Microsoft.

Still as the quest for the social network continues, the bigger loser in future, as i see, could be Mark Zuckerberg. How could this happen?

With Microsoft having 1.6% share, Yahoo and others are off in contention to buy stake in facebook, for Zuckerberg would not be interested in anything less than $15 billion, and none of them would be willing to shell out this much. Google obviously are not interested, and are trying hard to increase Orkut’s popularity, than what it already is, in US and other places. With OpenSocial, they have got this Facebook v/s all other social networking sites battle, which facebook may lose.
Now, at this stage even if Zuckerberg wants to sell off stake in facebook, who would, other than Microsoft, buy that? And obviously they would not be shelling out billions for this at a later stage. This leaves Zuckerberg to compromise for not-so-exorbitant price. Finally Zuckerberg may get only about $500 million for his 30% stake in Facebook, he had initially turned down when yahoo offered, which shot him to fame.

Now, does Microsoft buying the stake at $15 billion makes some sense, doesn’t it? :-)