Keep in mind also that a strategic investor is always willing to pay more for the same stake than a purely financial investor.
This is because the strategic investor -in addition to reaping financial rewards- will also gain something else. In this case, it could be an exclusive agreement for Microsoft's ads, or use of MSN as the default search engine, integration of other MSN products, etc.
Even if Microsoft's deal puts a nominal valuation of $10B on Faceboook, Facebook's IPO (if it happened) could put the valuation lower.
Btw, this is an important point to note when evaluating exit strategies. Depending on the circumstances, getting acquired could be a much better exit even if the public markets are interested in your IPO. Youtube was probably not worth $1.6B based on just its financials, but it was worth that much to Google (or at least Dr. Schmidt thought so).
This is because the strategic investor -in addition to reaping financial rewards- will also gain something else. In this case, it could be an exclusive agreement for Microsoft's ads, or use of MSN as the default search engine, integration of other MSN products, etc.
Even if Microsoft's deal puts a nominal valuation of $10B on Faceboook, Facebook's IPO (if it happened) could put the valuation lower.
Btw, this is an important point to note when evaluating exit strategies. Depending on the circumstances, getting acquired could be a much better exit even if the public markets are interested in your IPO. Youtube was probably not worth $1.6B based on just its financials, but it was worth that much to Google (or at least Dr. Schmidt thought so).