In acquisition news, which almost always is also unsubstantiated rumor news, it looks like Microsoft has its sights on everyone’s favorite social network Facebook. The rumor currently states that Steve Ballmer is looking to purchase Facebook for the enormous sum of $6 Billion. This isn’t the first time when a huge company has been rumored to be going after the social network de jour, but since the blogosphere is in a huff about it lets take a moment to analyze the possible merger.

MicroBook?

Microsoft currently has a big social network sized hole in its portfolio which Facebook could fit nicely. The real question that needs to be raised is why Facebook would even want to go through with this deal. Since it opened its platform it has had a groundswell of popularity. It’s the one and only company that I’ve seen that has managed to so elegantly collect demographic data from millions of users without them ever raising a complaint, and it’s flush with capital for the foreseeable future.

There seems to be no legitimate reason that the company would pick now to allow itself to be acquired. The only reason that I could divine as to why the might do it is that Microsoft has the corporate infrastructure to allow Facebook to transform its wealth of data into a business model.

Up until now, Facebook has been very good at collecting data and retaining users. It has not been very good at turning those users into revenue. It’s the basic problem of having a strong base of community members that basically have no idea why they’re there other than the fact that “all their friends are”. These users seem less likely to click on ads and otherwise jump through the monetization hoops that fuel the rest of Web 2.0.

Maybe by incorporating Facebook into a Microsoft offering like Live, new uses for this subscriber base can be derived and the gold mine that is Facebook can be truly tapped.

Web 2.0 Roundup

It’s still far too early to tell what the final word on the Microsoft / Facebook deal will be. For your reading pleasure, here are a couple other big Social Networking deals and rumors to put things in perspective.

MySpace. Purchased by Richard Murdoch’s News Corp for $580 Million. This was well before the site became the thousand pound Gorilla it currently is. One can only wonder how much it would have been worth if they had held out a few more years.

Bebo. In May, UK’s social network giant Bebo was supposedly being courted by Yahoo!. The acquisition would have been for around $1 Billion dollars. Considering it gets less traffic than either Facebook or MySpace, this number just goes to tell you that the social networking space is red hot.

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