Will Microsoft Buy Facebook? The Evidence Says "Yes"

Could it be? Is is possible that somewhere deep beneath the Internet's connective tissue there is a hint, a possibility that Microsoft could make an offer for Facebook? This is certainly rumor central material. However, there is a strong case made for the idea and with the buzz over the mobile war you have to assume that Microsoft's KIN ONE and KIN TWO mobile phones are not the end of their efforts to remain in the game.

The HTC Gambit
Recently, it was announced HTC would be paying Microsoft for each and every Android smartphone HTC manufactures. Without access to Microsoft's secret storehouse of Intellectual Property Rights, there is no easy way to figure out why. The fact is, in a move to to try and stave off Apple's legal assault, HTC decided to pay Microsoft "protection money." This is a testament of the power that still lies in Redmond, WA and what it can do. While they have not enjoyed much success on the Internet recently, Microsoft is not the kind of company to just sit by and watch.

The Evidence
Let us start out by looking at some facts. First, Microsoft already owns 1.4 percent of Facebook. While that is a far cry from ownership, it does make for a nice merger start or an outright buyout. There are some estimates that the total cost of the deal would be 15 to 20 billion US dollars. Currently there are only two companies that have the cash to consider such a buyout; Microsoft and Apple. Google could not buy Facebook at any price (Facebook would not stand for it) and nobody else has the cash.

Although it should be remembered that Facebook has all but declared war on the Internet and Google; while they are making startling gains, they have a long way to go before they make a dent in the Google empire. Microsoft has plenty of motivation and some things to bring to the table, though. Additionally, Facebook and Microsoft announced the development of a Microsoft Office application for Facebook, right? This is not a conclusive case, as it is barely a rumor as it is, but there is certainly a case to be made.

The Case...
Bing is no Google.The simple fact is, while Bing has made strides and Google recently updated their search results page in a way that is suspiciously "Bing-Like," Microsoft will never catch up to the search giant. Google currently handles 65 percent or more of the Internet's search traffic and by some estimates, 10 percent of the actual traffic itself. Bing has achieved 10 percent already, but at what cost? The chances of Microsoft catching up, or even getting close to Google are slim.

However, Facebook's search traffic has grown 10 percent to settle in at over 436 million queries in just one month this year during the period of January 2010 to February 2010. They are considered a threat to Google's empire. Further, Microsoft has made no secret of its intention to move most of its operations to the cloud. Much of last year, Microsoft was occupied with the roll-out of significant updates to its securitty and privacy offerings. Facebook has privacy issues that are increasingly a negative factor in their brand building efforts. The announcement of a collaboration on privacy and security with Microsoft would have a major positive impact. The more you consider the possibility, the more it makes sense.

The Future of Communications

Even if Facebook and Microsoft only move closer together, the impact to the Internet and the mobile market itself would be H.U.G.E. Facebook's aggressive moves recently have made it clear they intend to be everywhere. With over 400 million computer users and over 100 million mobile users, the two of them together would form a power block that would make it very uncomfortable for Google indeed. With Android an Open Source platform and Microsoft having some sort of hold over that market (enough to make HTC offer tribute), the combination of Facebook and Microsoft would give Microsoft a deeper penetration into the Android and Apple mobile segments. They would be exposing their cloud offerings to Facebook users.

There is also the possibilities of Facebook helping Microsoft stave off the attack of Google on their business email and communications bastion, one of the last they have with any kind of lead. Further, the integration of Microsoft Office online and Facebook which is underway would open a whole new market to Microsoft's venerable business tool and flagship product. This would radically alter the landscape. They are building the world that you work in, the world you will play in and the world that you will live in. Keep looking up.

Resources & References:
EWeek: 10 Reasons Why Microsoft Should Buy Facebook Now!
CultOfMac: Apple Second Only to Microsoft in Cash Investments: that's All About to Change
EWeek: Google Unfazed by Microsoft Facebook Challenge