Microsoft interested in Facebook networking

Microsoft Corp has reportedly shown interest in buying a 5 per cent stake in Facebook, the popular social networking website, suggesting a deal that could value the site at as much as $10bn.

The move could help Microsoft develop an easy access to young users and let Facebook tie up with the major software maker when its expansion depends upon the production of small applications from independent developers on its site.

The two are already related as Microsoft is the exclusive provider of banner advertising and sponsored links on the site. The software giant is prepared to shell out between $300m and $500m for 5 per cent stake in Facebook.

According to the Wall Street Journal, Microsoft’s rival Google is also keen to invest in Facebook. Both the companies declined to comment.

Other players have also expressed interest in the site and last year, Yahoo! had offered to buy it for $1bn.

Facebbok already has more than 40 million users and with a sudden explosion in its popularity, the site is gaining 200,000 new registrations every day. Founded three years ago, Facebook provides an easy forum for people to stay in touch with friends by exchanging photos, messages, electronic gifts and tips.

Facebook’s 23-year-old founder, Mark Zuckerberg, could become one of the wealthiest men in Silicon Valley if the deal is successfully through. Harvard dropout Zuckenberg had thought of the site in his college dormitory and is keen to watch it expand.

However, the $10bn price tag set by Microsoft looks expensive since the site is expected to make a profit of $30m this year. But with the rising number of new entries on the site, the software maker is perhaps eyeing bigger targets.