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Facebook's "Imminent" Deal: What's The Point, Really?

CNBC.com

We've heard the Google , Microsoft , Facebook 'story' before, but today's rendition comes with a new sense of urgency: The New York Post, then moments later the Wall Street Journal, report a deal between someone and Facebook is imminent: 24 or 48 hours away.

The minority stake one would take in Facebook, somewhere between 5% and 10%, would value the social networking upstart at around $15 billion. All of this is about the 96 million eyeballs (48 million users) Facebook has, and the enormous amount of money it may eventually--or may already--be generating from the display advertising it offers.

But is a deal imminent? Or even a good idea? The fact is, Facebook has an advertising partnership with Microsoft that runs through 2011. Microsoft doesn't need to do anything right now unless it's worried Google will step in and snap Facebook out from under it. It's happened before (AOL, DoubleClick) and Microsoft may be determined not to let it happen again.

But would Google even bother, especially at what seems to be an exorbitant multiple? The fact is, Google has its own social networking software. Orkut is a pretty compelling algorythm that some say rivals anything Facebook has to offer. Google already attracts its own eyeballs. And if it did do a deal for a chunk of Facebook, it'd have to spend a lot of time unraveling the ad arrangement it already has with Microsoft.

Would Google do it strictly defensively, trying to make sure Microsoft doesn't get it, whether Google wants it or not? Maybe. But that's a big chunk of change and an expensive way to do business. Sure, Google could afford it. But would it bother?

The deal also is not necessarily a no-brainer for Microsoft. As I mentioned, it already has a deal with Facebook. The paltry minority stake gives Microsoft no control over Facebook's business. And we're talking a boatload of money for no real control. Not to mention that a social network of its own would be a major departure for Microsoft. Not such a bad thing when diversification can be your buddy, but still, it might be hard to fold Facebook into the Microsoft culture.

Microsoft may be sniffing around for a deal simply out of the "coolness" factor connected to owning such a hot net property. And it too might be playing defense against a possible bid by Google. A stake in Facebook will give whoever gets it a leg up in ad partnerships the next time around. And could offer a healthy return if Facebook ever goes public.

Don't get me wrong: Facebook is slick. It's neat. It's arguably the Google of its time with the same revolutionary potential as one of its supposed suitors. But unlike Google lo those many years ago, that thinking is already priced into Facebook's value. And that makes this a far more difficult and expensive proposition.

But as these two Super Powers rattle their wallets over this tiny piece of real estate, investors have to wonder whether they might be better served, standing down, taking stock of the situation and realize that Facebooks' valuation only continues to climb because these guys just won't walk away.

Questions? Comments? TechCheck@cnbc.com