Microsoft and Google Battle for Facebook

Who might be the new face of Facebook? Microsoft.

According to the Wall Street Journal, Microsoft plans to invest as much as $500 million in the social networking company. If the deal goes through, Facebook would value at $10 billion and Microsoft would own 5% of Facebook. (Source: pcworld.com)

But why Facebook? First of all, the company boasts some impressive stats; though it has only been running for a little over three years, Facebook has close to 50 million active users. As well, its client base is increasing rapidly.

Another Facebook quality that Microsoft may find attractive is the strong connection that Facebook has with its users. In fact, more than half of Facebook's clients visit its site on a daily basis. Facebook also has access to a wide range of information about its users since people post personal data on their site profiles. This knowledge that Facebook has access to is of interest to advertisers such as Microsoft. Basically, the more users Facebook gets, the more consumers that see Microsoft's product and service ads.

But writing a check and buying part of Facebook is not as easy as it sounds. Microsoft is not the only one who wants to bid on the company.

Who is Microsoft's opponent?

Why Google, of course.

According to a research analyst," Google would love to keep it out of the hands of Microsoft or at least drive up the price." However, a Facebook battle would not be the first competition between Microsoft and Google. Two years ago, the companies wanted a 5% stake in Time Warner's AOL. Google took the prize by agreeing to invest $1 billion into AOL as part of a wide-ranging advertising partnership. (Source: ap.google.com)

This time, Microsoft is setting itself up to win. The company already has its foot in the door with a contract to deliver online ads to Facebook until 2011. Rumors have also been circling about the two companies considering extending their current contract.

So far, Microsoft, Google, and Facebook, refuse to comment on the situation.