MediaBytes 10.25.2007

MICROSOFT will purchase 1.6% of FACEBOOK for $240 million, which places a $15 billion valuation on the three-year-old company. Microsoft will begin to sell banner ads for international versions of the site and split the revenue with Facebook. In related news, RIM launched Facebook software for Blackberries.

BARRY DILLER told a group of conference attendees that major media companies still don’t “get” the Internet. He advised media companies to create new Internet properties from scratch, citing Time Warner’s popular TMZ.com as an example to follow. Diller believes media companies suffer from a fear of investing in companies and developing new things, a necessity that is understood and encouraged in the tech world. He labeled the TV business “temporarily prehistoric.”

DEUTSCHE TELEKOM is preparing to create a two-tier Internet for its European DSL service. A senior VP told a conference that it will charge a fee to companies that deliver online video to its customers, claiming that the network cannot handle Internet video. DT will seek payments from major media companies including giants such as Google and Bertelsmann.

WPP GROUP has acquired BLAST RADIUS, a digital agency that specializes in social-networking. The company’s clients include Nike, Starbucks and Whirlpool and it generates about $40 million in annual revenue. Blast employees will remain in their current offices but become closely aligned with WPP’s Wunderman agency.

VONAGE can’t catch a break. A security firm found that hackers can intercept and redirect the company’s Internet phone calls. The beleaguered VOIP-provider was informed of the problem over a month ago. However, the company has not yet responded to the problem and will not comment on it. Last week AT&T filed a patent lawsuit against the company, making it the third major phone company to do so.

About Shelly Palmer

Shelly Palmer is a business advisor and technology consultant. He helps Fortune 500 companies with digital transformation, media and marketing. Named LinkedIn's Top Voice in Technology, he is the co-host of "Think About This with Shelly Palmer & Ross Martin." He covers tech and business for Good Day New York, writes a weekly column for Adweek, is a regular commentator on CNN and CNBC, and writes a popular daily business blog. Follow @shellypalmer or visit shellypalmer.com

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