Oct. 24 (Bloomberg) -- Facebook Inc. is considering bids from Microsoft Corp. and Google Inc. for a minority stake in the social-networking Web site, people familiar with the talks said.

An agreement may be announced in the next day or two, said one of the people, who asked to remain anonymous because the talks are private. The stake will probably be about 5 percent and would value Palo Alto, California-based Facebook at $10 billion to $15 billion, the people said.

Microsoft and Google are seeking to benefit from the surge of visitors and advertisers on social-networking sites. The companies also want an international ad partnership with Facebook, the owner of the second-most-popular social site, the people said. Microsoft, the biggest software maker, already has an agreement to sell Facebook ads in the U.S.

``They have incredible amounts of user data'' that allows advertisers to target consumers, said Jeremiah Owyang, an analyst for Forrester Research Inc. in Cambridge, Massachusetts. ``It's like community in a box.''

Spending by advertisers on social-networking sites such as Facebook and bigger rival MySpace may almost triple to $3.63 billion globally by 2011, according to EMarketer Inc., a market researcher in New York.

Google's Edge

Google, owner of the top Internet search engine, outdoes Microsoft 7-to-1 in Internet ad revenue. That makes it more important for Microsoft to keep its relationship with Facebook, which had 73.5 million visitors in September, according to researcher ComScore Inc. in Reston, Virginia.

Microsoft spokesman Bill Cox, Facebook spokeswoman Brandee Barker and Mountain View, California-based Google's Matt Furman declined to comment.

Microsoft, based in Redmond, Washington, began talking to Facebook about the stake in the summer, the people said. Facebook discussed several options, including a complete sale of the company, and decided to sell a small equity stake that would give it cash before an initial public offering in a few years, one of the people said.

Microsoft Chief Executive Officer Steve Ballmer said last week that his company has a ``great partnership'' with Facebook. He declined to comment on reports that Microsoft would buy a stake. Earlier this month, he called the stories ``idle speculation.''

Facebook CEO Mark Zuckerberg, speaking last week at the same conference, said both companies are happy with the current ad deal.

Dorm-Room Project

Facebook, started by the 23-year-old Zuckerberg in 2004, has grown from a college dorm-room project to a site with more than 20 million active subscribers.

Teenagers and young adults have flocked to Facebook since the site expanded beyond university students a year ago, attracting advertisers that want to target users of a particular age or gender.

Social-networking sites are ``where young people are spending the bulk of their online time,'' said Debra Williamson, an analyst with EMarketer. ``Marketers are trying to figure out how to reach that audience.''

Microsoft, Google and Yahoo! Inc. are rushing to make sure they aren't left out of the market. In August last year, Google struck a deal to provide search and advertising features to MySpace. Yahoo, owner of the most-visited U.S. Internet site, forged an agreement last month to sell video and banner ads for Bebo Inc., owner of the most-popular social Web site in the U.K.

Ad Sales

Microsoft boosted ad revenue by 21 percent to $1.84 billion in the fiscal year ended June 30, while Google's ad sales jumped 64 percent to $13.3 billion in the same period.

Google handled five times as many Web search queries as Microsoft in August, according to ComScore. That gave Google more opportunities to sell ads.

Microsoft rose 35 cents to $31.25 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has climbed 4.7 percent this year. Google shares, which have advanced 47 percent this year, rose 5 cents to $675.82.

Facebook plans to more than double its staff to 700 in the next year, Zuckerberg said last week. Originally limited to college students, the site opened up to all Internet users in September 2006.

The company needs more money to hire engineers and salespeople, said Karsten Weide, an analyst at IDC in Framingham, Massachusetts. The company also uses ``a lot of servers, a lot of memory, a lot of bandwidth -- and all that is very expensive,'' he said.

Facebook's users increased more than 6 percent in September from the previous month, ComScore said. Visitors to top social- networking site MySpace, owned by Rupert Murdoch's News Corp., rose 1 percent to 107.3 million.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: October 24, 2007 16:05 EDT