$500 million is an awful lot of money for a small stake in a Web site -- so I thought I'd make a list of things that Microsoft could spend its money on instead.
Microsoft is the latest company to go a-courting Facebook, that worldwide office productivity menace, with the intent of purchasing a 5% stake for half a billion dollars.
That puts the Facebook evaluation at $10 billion, although Reuters says that Facebook founder Mark Zuckerberg has the company's valuation at a cool $15 billion.
$500 million is an awful lot of money for a small stake in a Web site, especially one that only makes $30 million profit a year.
So I thought I'd make a list of things that Microsoft could spend its money on instead:
- 59 Abrams Tanks
The Australian government recently purchased 59 Abrams tanks from the US for a mere $550 million. With 59 tanks at Facebook's door, I'm sure Microsoft could negotiate something in excess of 5% stake -- and then use the tanks to visit Google and settle some "outstanding issues".
- 10 Joint Strike Fighters
Tanks are cool, but they are terrestrial -- with a compliment of planes, no one is beyond your reproach. With an expected cost of $48 million for a basic JSF, there is still some pocket money left for an extensive marketing campaign, every purchase nowadays need a marketing campaign. And you were worried about Steve Ballmer throwing chairs.
- More Big Macs than you can handle
Using the Big Mac Index as a basis for the average Big Mac price, it turns out that Microsoft could purchase 147 million American big macs, or almost 170 million Aussie big macs. The benefit of this purchase is that long after Facebook has been and gone, the Big Macs will be in much the same condition was when they were bought.
- 1.25 Million of OLPC/Vista/iPhones
$399 must be a magic US price point, as it is the same cost as an ultimate copy of Vista, a One Laptop Per Child XO laptop and an iPhone.
- 4000 bronze statues
4000 statues of the man of steel is definitely a good way to express comic book pride, but when used as a motivation tool, they can be pure gold. If the employee of the month got to have their face engraved on a Superman statue, it would be the ultimate geek management tool..
To put a bit of perspective on the whole matter, consider that for $17 billion a buyer could purchase the nominal gross domestic product of Iceland for 2006 instead.
That could be the key to the question of who will ultimately buy Facebook.
If the entire population of Iceland works hard at it for the next twelve months, they could be the proud owners of a social networking site.