Gates Gives Google a Facebook Facial

Oct. 27 2008, Published 7:07 a.m. ET

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What's $240 million to Bill Gates when it means publicly stomping those pillaging sorts over at Google? After a hotly contested bidding war, reports Wednesday evening announced that Facebook has accepted Microsoft's offer over Google's to act as the social-networking site's primary advertising partner.

The partnership is a critical victory for Gates, as his company has struggled with a relatively lousy stake in the online ad market. For its part, Facebook earns the $15 billion valuation company founder Mark Zuckerberger had been seeking—his personal 20 percent stake in the company puts his fortune in the stately $3 billion range. If ever Facebook were to sell, Microsoft's new position makes it prime for the purchase, but many believe its high valuation is in step with Zuckerberg's wishes to one day take Facebook public. And, you know, rule everything.

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Still, it seems the loss may only be annoying to Google. The company remains comfortable in the social-networking arena with its lucrative ad deal with the still-larger-than-Facebook site MySpace. The bigger issue: Does interrupting a Google-feast with news of defeat only anger the Google-beast?


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