Google and Microsoft are each vying to take a 5-10% stake in social-networking hotspot Facebook, the New York Post reported Wednesday. The stake will go to the one whom Facebook chooses to broker ads for its site outside the U.S., according to a report on the Wall Street Journal's website. In 2006, Facebook inked a deal with Microsoft to sell banner ads on its site until 2011. Facebook is looking to expand internationally, including some foreign-language versions of its site. Unnamed sources say Google is trying to drive up the price in order to discourage Microsoft, and that a deal announcement is expected as early as today. Despite recent comments by Microsoft CEO Steve Ballmer calling social networking sites "a bit faddish," Microsoft is hanging tough, the Post says; sources say the software giant is willing to pay "any valuation possible" to keep Facebook out of Google's hands. If Google wins, sources say, it will try to unwind Microsoft's existing ad deal with Facebook. The companies have discussed a $15 billion valuation on the company, putting a 5-10% stake at $750 million to $1.5 billion. While either company could foot such a bill independently, sources say both are unlikely to do so, preferring to bring in a financial player on the deal. No parties had any comment.
Commentary: A Crazy Idea To Jump Start Facebook's Revenues • Social Networking Sites: Blogger is Biggest, Facebook Growing Fastest • Microsoft/ Facebook Rumors Persist • What If Facebook Can’t Sell Any Ads?
Stocks to watch: GOOG, MSFT
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