Microsoft defends Facebook stake

MUMBAI (Reuters) - Microsoft Corp Chief Executive Steve Ballmer said on Monday his firm's acquisition of a 1.6 percent stake in socializing Web site Facebook for $240 million was an important investment, not a mistake.

"We didn't make a mistake," Ballmer told reporters on the sidelines of a business conference in Mumbai.

Analysts have said Microsoft paid a steep price on a bet that the three-year-old firm would be able to transform itself into a hub for all sorts of Web activity.

"The valuation of Facebook is still to be determined. Certainly today, it's very, very popular. So for a company like ours that wants to be a pre-eminent presence in this space, it's very important for us," Ballmer said.

"Will Facebook be worth $5 billion, $15 billion or $50 billion some years down the line is really up to their team and how they take it forward."

Ballmer, who joined Microsoft in 1980 at the request of his Harvard classmate Bill Gates, said last month that the company was focusing on up to 20 smaller acquisitions of $50 million to $1 billion each annually rather than mega-deals.

Asked if Microsoft was interested in buying Yahoo Inc, Ballmer said: "My answer is a considered 'no comment'."

"We want to succeed in the online advertising space. What happens with Yahoo, we'll all have to wait and see."

Ballmer, who is going to China on Monday night, said the Chinese market was important to Microsoft and that they were making some progress on the issue of intellectual property rights.