Microsoft and Facebook have reached a deal that would give Microsoft a 1.6 percent stake in the social networking company Facebook. Microsoft agreed to pay USD 240 million for that stake. The deal is based on a valuation for Facebook of USD 15 billion.

The companies also announced plans to expand their advertising partnership, making Microsoft the exclusive third-party advertising platform partner for Facebook. Microsoft will also begin selling advertising for Facebook internationally, in addition to the existing arrangement in the US. Almost 60 percent of Facebook's users are outside the US.

Facebook is a social utility that connects people with friends and others who work, study and live around them. People use Facebook to keep up with friends, upload an unlimited number of photos, share links and videos, and learn more about the people they meet.

Launched in February 2004, the website now has 42 million active members worldwide as of October 2007, and expects to pass 60 million users by the end of the year. Mark Zuckerberg, a former member of the Harvard Class of 2006, will not be short of change any time soon: Zuckerberg's 20% stake in the company would now be worth $3BN and, despite the fact that MySpace has 110 million users, Facebook continues to be the poster child of the social networking movement.