Microsoft, in hopes to bounce back from its string of defeats in the Internet wars against Google, is in talks to buy a stake of up to 5% in Facebook at a cost of between $300-500 million (according to The Wall Street Journal). This would value Facebook at a cool $10 billion or more.
Don't count Google, Yahoo! and others from trying to derail Microsoft's discussions and seek to invest in -- or buy -- Facebook themselves. Stakes are incredibly high, and Facebook is incredibly hot. But, in a companion piece, The Wall Street Journal also writes a cautionary tale to Facebook about the potential downside of being acquired by one of these 800 pound gorillas(using Yahoo!'s acquisition of GeoCities in the late '90s as a prime example).