MSFT’s 5% stake in FB vs. GOOG’s 5% stake in AOL

If the news that Microsoft is investing $300-$500 million in Facebook to acquire a 5% stake in the company sounds familiar, it may be because it sounds similar to the 2005 Google investment of $1 billion for a 5% stake in AOL. The investment will secure a boat-load of advertising inventory for Microsoft (or Google, as, according to the Wall Street Journal, Google is also interested in investing in Facebook.) The Google investment in 2005 gave AOL a $20 billion valuation. At $500 million, the rumored MS investment would give Facebook a $10 billion valuation.