Microsoft to Buy 5% of Facebook? I Call Bogus.

Here we go again.

Microsoft is now supposedly in talks to buy a 5% stake in Facebook for $300M-$500M. That puts the value of Facebook at between $6B and $10B. It’s funny, only six months ago, Facebook’s minimum offer (that nobody would pay) was $2B. Now, with their amazing(ly low) $150M a year revenue, they want $10B, a five fold increase. What’s changed since then? Facebook Applications? Don’t make me laugh.

Clearly, their “2 billion” dollar self-valuation was based on what they knew. There are two explanations: either they knew about Facebook Apps coming and felt it wasn’t worth that much, or they cooked up and implemented the $8 billion dollar Facebook Apps idea overnight. I call bogus. This rumor is bogus. Facebook can’t justify a five fold increase in their asking price in a mere half a year without a substantial (and I mean five fold) increase in their traffic, users, or revenue — none of which seems to be the case.

Facebook Apps may have been a lucky idea they stumbled into a few months back, but it certainly can’t be the reason they are going to ask for $10 billion dollars. It’s simply not proven yet. And on a price based purely on speculation, the timer is ticking, and Facebook has yet to see dazzling revenues that justify even a price tag of $2 billion.

That, or Microsoft is just that desperate.