Giants seek to capitalise on site’s popularity

After weeks of rumours, Microsoft has taken a stake in wildly successful social networking site Facebook. However, the software giant will pay a steep price for the pleasure, doling out $240m for just a 1.6 per cent share.

Microsoft is paying the high price to get exclusive third-party access to selling advertising on Facebook. The investment gives Facebook a paper valuation of $15bn but critics are divided over whether, at this early stage of Facebook's development, Microsoft will get value. Reports had suggested Microsoft and Google were involved in a two-way tussle over Facebook.

Separately, RIM announced Facebook for Blackberry Smartphones as way to optimise the site for BlackBerry users. The application runs natively on devices and lets users have messages and other interactions pushed to them in real time. The announcement comes as many IT managers seek to curb use of Facebook in working hours.