Kara Swisher

Recent Posts by Kara Swisher

Update of Facebook Funding Update: Google’s Hail-Mary Pass?

Please see this disclosure related to me and Google.

It’s an open secret in Silicon Valley that search giant Google grabbed YouTube from Yahoo at the last minute in a deal-making frenzy.

I didn’t mean in my last update posted earlier today to leave out that possibility happening again with regard to Facebook’s current round of funding discussions.

While Yahoo and Microsoft have been most aggressive in courting the hot social-networking site, sources close to Facebook said that Google is also part of the ongoing discussions about a new round of funding for Facebook, although it might not take the form of a large investment.

What’s of interest to Google, as well as Yahoo and Microsoft, is Facebook’s potentially large international ad-sales business, which all three would like to have.

Under a different kind of scenario, Facebook would take an investment from a range of private equity investors, do an international ad deal with Google (which might or might not make an investment in the company) and still have its U.S. ad sales served by longtime partner Microsoft.

Such an arrangement would be a blow to Microsoft, which has been seeking to get closer to Facebook, partly out of paranoia of Google and its own lack of innovation in the Web 2.0 space.

But, according to sources, that’s just what might happen given that Facebook execs are wary of linking themselves too closely with Microsoft. Plus, a stronger relationship with Google would burnish its independent credentials, which many think is critical in the next phase of Facebook’s development.

Who’s to say what’s going to happen, but it could happen rather quickly, even within the next 24 hours.

And that’s a good thing, because to my mind, Facebook’s got to get this funding roundelay behind it and get busy making its service bigger and more powerful.

It’s easy to get sucked up into the Silicon Valley reality-distortion field, and Facebook would do well to get the giant bag of cash it thinks it needs and move on.