Microsoft 'in talks' to buy Facebook

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Microsoft has been speaking with social networking giant Facebook about a possible acquisition, according to reports..

The Wall Street Journal cited a source close to Microsoft who claimed that members of its financial team had been in contact with Facebook to "gauge the company's willingness" to sell.

A Microsoft spokesperson said the company would not be commenting on the report.

News of the talks comes just days after Microsoft called off its pursuit of Yahoo. The two companies had spent nearly three months in a very public saga that quickly turned from an acquisition offer to a hostile takeover threat.

Microsoft chief executive Steve Ballmer finally withdrew the US$42 billion offer on 3 May.

Even before the Yahoo saga culminated, industry analysts had mentioned Facebook as a possible Microsoft target.

Microsoft has a history of working with Facebook. The company has been brokering banner ads for Facebook since 2006 and acquired full advertising rights last year as part of a US$240 million investment package.

The deal gained headlines when it was revealed that Microsoft would gain only 1.6 per cent ownership in the deal, placing Facebook's value at upwards of US$15 billion.
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