Microsoft is investing $240 million in Facebook to acquire 1.6 percent stake. According to Facebook, Microsoft is now “the exclusive third party advertising platform partner for Facebook. The company finds the deal important because the 60 percent of the site’s nearly 50 million registered users are outside the U.S. Microsoft CEO Steven Antony Ballmer defended the deal saying, “The valuation of Facebook is still to be determined. Certainly today, it’s very very popular. So, for a company like ours that wants to be a pre-eminent presence in this space, it’s very important”.

However, many analysts wonder whether Microsoft made a wrong decision to spend a huge amount for a small stake in Facebook. On the other side, there is a rumor that the 23 year old Facebook founder Mark Zuckerberg is eyeing to acquire the Chinese social networking site for $85 million. Boasting to have over seven million users, Zhanzuo would grant Faceboook a sizable chunk of China’s social networking market at a time when competition is heating up in the U.S. market.