The blogosphere went a little nuts on reporting the story of how Microsoft paid $240 million for a (relatively small) slice of the sweet sweet Facebook pie. It is believed that this deal sets the value of Facebook at $65 billion.

In fact, Dana Cimilluca of the Wall St. Journal pointed out that:

That’s right, unlike past meteoric technology risers, the three-year-old company is actually profitable. Facebook’s valuation also equates to 100 times its $150 million of annual revenue.

To put a valuation like that into perspective, if you slapped it on General Electric, the industrial conglomerate would have a market cap of $11 trillion, just $1 trillion short of the total U.S. GDP.

Terrence Russell of Wired magazine, though, bravely argues that Microsoft got a deal. His main three arguments:

Microsoft Only Needs an Entrenched Position If the company is to go forward as planned then taking a small, strategic piece of Facebook makes sense. Microsoft’s financial interests in Facebook’s ad platform already exist, so it only makes sense to strengthen that tie as the hype builds.

Microsoft Wouldn’t Drink the $15 Billion Kool-Aid Even though Facebook can claim that it’s 1.6% of $15 billion, it will always be $240 million to Microsoft. At the end of the day, the social networking site is probably just happy to have a lighter load for generating revenue, and Microsoft is glad it didn’t dump $750 million into what could be the next Skype.

Microsoft Was the Highest Bidder It’s safe to say that Microsoft was the highest bidder because it wanted this particular investment more. That’s not to say that Google turned its nose up at Facebook entirely. The interest was there — just not at Facebook’s asking price.