The news last week of Microsoft’s purchase of a 1.6% equity stake in Facebook has had plenty of commentary with widespread analysis and opinion on the deal.

I found the most interesting commentary in an article in this week’s Economist which speculates on what it means for Facebook, Microsoft, Google and Yahoo! (the ‘FMGY’ in this post’s title).

With a sub-heading that says Microsoft will pay any price to keep some things out of Google’s hands, The Economist believes there are quite a few winners and one specific loser:

[…] Mr Zuckerberg and Facebook’s other early investors, of course, have carried off the biggest victory. Mr Zuckerberg is now worth some $3 billion on paper. Google will not suffer much. Its seemingly endless rise continues. Its own social network, Orkut, does well in emerging markets and is about to get a revamp that may make it a stronger rival to Facebook.

It is Google’s and Microsoft’s other rival, Yahoo!, which now looks really forlorn. It has been outmanoeuvred by everybody in the acquisition game. It keeps losing to Google in search and advertising, and unlike Microsoft it has no software-licence revenues to fall back on. Last week it shut down its own social network, Yahoo 360°, and hardly anybody noticed.

The Economist | Friend accepted