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  Is Microsoft Now Eyeing Facebook?

By Branko Miletic | Monday | 12/05/2008

Like a spurned Hollywood starlet, the list of suitors to which Microsoft has been linked to in the past 10 days since it walked away from its intended marriage to Yahoo is growing by the day, with AOL, Facebook and MySpace among the better known candidates.

Click to enlarge
But even if that list was to be believed, not one of those companies could provide Microsoft with the same level of economic sustenance to help in growing its online business like Yahoo.

Then again, what else is new for Microsoft? Although it is a global leader in operating systems and software, it has consistently failed to become a dominant force in the internet marketplace.

The company's online division is slated to make sales of some $US3.3bn this year, roughly equivalent to about 5.5 per cent of its total sales, however at the same time it will also make an operating loss in this division of somewhere in the region of $US1bn.

Thus in the context of the $US50bn annual global online advertising market, Microsoft, remains a distant third in the marketplace.

So then why was Microsoft chief executive Steve Ballmer unwilling to pay the extra $US10bn for Yahoo, is still a mystery.

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