When Mark Zuckerberg turned down Yahoo's $1 billion offer for his three year old kid Facebook, first generation silicon valley entrepreneurs questioned his logical and analytical ability. And his common sense. He was described as egoistic- or pompously childish. Facebook is after all nothing but an on line meeting place where kids and some grown ups post photos and communicate.
Now after Microsoft's decision to purchase (lagging behind Google, desperate to spruce up online advertising market) a stake of as much as 5 percent for an investment between $300-$500 million gives Facebook an overall value of mammoth $10 billion. There are also rumors that Microsoft may keep Facebook away from Google's reach. 
There is a reason to do so. Emarketer forecasts that US ad spending on social networking websites will go upto $900 million, double than previous year.
$10 billion for a three year old site created by Mark Zuckerberg-- more than twice the market cap of New York Times.
He is not stupid. $1 billion was too less.
YouTube $1.6 billion acquisition now looks small.
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