Now, Facebook is worth over $200 billion, and that little investment turns out to be the best-performing equity investment Steve Ballmer ever made as CEO of Microsoft.
Microsoft sold some of its Facebook stock after the IPO in 2012, but seemingly still holds some — Microsoft's last annual filing with the SEC, in June 2014, notes only a "partial" sale of its Facebook stake.
But while that stake may be worth a lot of money, it doesn't seem to be getting Microsoft much respect these days.
Today, Facebook confirmed that it's no longer including search results from Bing on its site. The Bing deal began around the time Microsoft bought its Facebook stake, and was renewed in 2010.
The move will hurt Bing's search market share, which was already ailing after a recent redesign of Microsoft's consumer web site, MSN.
Meanwhile, search is becoming more important to Facebook. Earlier this week, Facebook introduced a new search feature that will let users search through individual posts, not just pages. That doesn't exactly put Facebook into direct competition with Google for web search, but it does mean that Facebook becomes a lot more useful as a place to find information that your contacts have posted.
The companies have been moving apart for a couple of years now.
Their original deal called for Microsoft to be the exclusive third-party ad partner. But Microsoft's ad platform business never really took off, and Microsoft wrote down almost the entire $6.3 billion purchase price of aQuantive, the company it bought in 2007 to try and make a play in online advertising.
A few months after the write-down, in 2013, Facebook bought the old aQuantive ad platform, Atlas, from Microsoft.
Facebook couldn't even be bothered to develop a version of its app for Microsoft's Windows Phone platform; that task was left to Microsoft itself.
Microsoft told us, "Facebook recently changed its search experience to focus on helping people tap into information that’s been shared with them on Facebook vs. a broader set of Web results. We continue to partner with Facebook in many different areas."
The latest split may hurt Microsoft's Bing market share, but the company seems a lot less interested in making money with online advertising since Satya Nadella took over. There hasn't been any official announcement to that effect, but a few months ago, Microsoft fired most of its global advertising salesforce.
Dominating online advertising was a Microsoft dream from the last decade. The new Microsoft is focused elsewhere.
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