Microsoft is in talks to buy a stake in the social networking site Facebook, according to reports in the Wall Street Journal (WSJ).These talks may result in a battle between the company and major rival Google, which is also thought to be keen to invest in the site.
Microsoft approached Facebook recently with investment proposals valuing the start-up at $10 billion, say sources "familiar with the matter".
If negotiations prove successful, Microsoft could purchase a stake in the site of up to five per cent for a cost of between $300 million and $500 million, according to the sources.
Microsoft already works with Facebook as the sole provider of sponsored links and banner advertising on the site.
Speaking about a potential deal, the BBC reports that Andy Miedler from the US brokerage Edward Jones commented: "We think it's likely that Microsoft would be considering an investment in Facebook given their existing relationship and the strong growth potential of that market."
Representatives from Google, Microsoft and Facebook all declined to comment on the speculation.
According to the WSJ, Microsoft had considered attempting to buy Facebook outright, but sources believe such a move to be "unlikely at this time".
Founder of the site Mark Zuckerberg has "steadfastly kept his company independent with the goal of eventually taking the company public", the publication adds, saying that in a round of negotiations last year, he refused approaches from Microsoft as well as search engine Yahoo!.
