As was said previously, its 1.6% for $240 million, not 1%. The value is meaningless - I doubt anyone involved in the deal values the company at anywhere near that much right now. Microsoft is not just investing in FaceBook, they are investing in social networking, and everything that comes with it (how to server more / better ads to people). Plus they were in a battle with Google for the partnership, so there was prestige element to it. Not to mention the fact that neither company wants to let the other one get the upper hand in the market (a mere coincidence that Google Open Social API was announced so close after the MS / FB deal?).