Confirmed: Microsoft buys a large part of Facebook

Rumors that have long flourished in the Valley have now been confirmed: Microsoft buys 1.6% of Facebook for 240 MUSD. Microsoft is above all buying themselves access to one of the world’s largest user bases. This means they’re also taking on Google head on and will be competing directly with them when it comes to creating the largest platform for social applications.

Having Microsoft and Google competing directly within the social media sphere will certainly push the development of an open social platform forward.

In combination with the anticipated revolution in mobile Internet usage we can be sure that 2008 will be the year where platforms for secure profile sharing between applications and services will become a reality, ending the need for a multitude of user accounts.

Google acquired the microblogging service Jaiku

The popular microblogging service Jaiku was yesterday acquired by Google for a sum yet unknown. The founders, Jyri Engeström and Petteri Koponen, went public with the news on their microblog and blog yesterday to the surprise of many. On their FAQ about the acquisition they’re writing:

Q: What is Jaiku?
A. Jaiku is an activity stream and presence sharing service that works from the Web and mobile phones. Jaiku, Ltd. was founded in February, 2006 by Jyri Engeström and Petteri Koponen from Finland. The service was released on the Web in July 2006. Jaiku is based in Helsinki.

Q: Why did Google acquire Jaiku?

A: Activity streams and mobile presence are important areas where we believe Google can add a lot of value for users. Jaiku’s technology and talented team are a great addition to Google’s current application and mobile teams.

Interesting enough Google decided to acquire Jaiku and not the more popular, and similar, Twitter, which is very popular in the US. Jaiku was cheaper and in many ways a better service. When Twitter focused on fast user growth Jaiku chose to focus on innovation.

tartups in the social networking genre really have two options if they want to be acquired. Either they have the largest user base or are the best innovators. Facebook has a large user base; Jaiku has an innovative service with a growing user base. Google has for a long time known that it is better to buy innovation than users. Judging from their acquisitions only YouTube and DoubleClick were market leaders in terms of users in their respective niches.

In the future I think it will be much more common for Google, Yahoo, Microsoft and other big actors to acquire early. Jaiku certainly had a user base but had not had any success similar to that of the other big recent acquisitions: YouTube, Del.icio.us or Flickr.

Congratulations to Jyri, Petteri et al! We wish you good luck with your new masters.