FANTASY M&A —The buzz is all about Microsoft, or possibly Google, taking a stake in Facebook, the popular social network, at a lofty valuation as high as $15 billion. But the logic of those deals is driven by advertising — the more targeted, the better. But what, exactly, are advertisers hoping to target, and why? Besides crude demographics and geographies, the most logical hooks for ads are Facebook users' expressed preferences — the books, music, and movies they're increasingly listing on their profiles. And who has the best data on what consumers will buy? Why, Amazon.com, of course. The logic of a combination — a merger of the two giant databases of consumer preferences is, at least on the surface, compelling.

The Wall Street Journal is reporting that Facebook is negotiating with Microsoft to sell a stake in the hot social network at a valuation between $10 billion and $15 billion. That would net Mark Zuckerberg's company between $300 million and $500 million in cash, without Zuckerberg having to surrender any meaningful control over the company; the stake would represent 5 percent or less of Facebook. What's not clear is why a deal's happening now, save to lock in a stratospheric valuation. Some time ago, a Facebook insider called Zuckerberg "a crazy kid" for not selling. And we've said Facebook's valuation claims seemed a bit puffed-up. But given that suitors' offering prices have rocketed tenfold since then, Zuckerberg doesn't seem that crazy anymore. Instead, it's Microsoft executives, driven mad by Google and MySpace envy and determined not to miss out on the social-networking trend, who seem, well, a bit off.

The notion of social networks like Facebook and Google's Orkut was that they would connect real-world friends, not drive them apart. But a push, driven by technical idealists, to "open" such websites could be driving a wedge between two old friends. David Recordon, right, who recently rejoined blog-software maker Six Apart, has cast aspersions on efforts by Google to make it easier for programmers to hook their software — like Facebook's popular applications — into Orkut and other Google products. So far, it may sound like all business. Companies trash rivals' plans all the time. Here, however, is where things get a bit more personal.

Pity the poor Facebook-app developer. The hot social network won frothing fanboys up and down the Valley when it opened up its site to any programmer who wanted to create amusing add-ons. With MySpace actively blocking some third-party applications, Facebook looked like a hero. Now, however, the bloom is off the rose.

Marc Canter, who once upon a time founded the multimedia-software company Macromedia, but now largely gets attention mostly for napping through conferences, has blogged an open letter to Facebook's CEO Mark Zuckerberg. Canter misspells his name as "Zukerberg" and refers to him repeatedly as "dude," because that's apparently Canter's notion of the way these kids talk today. That would be enough reason, in our book, for "Zukerberg" to ignore him. But no, it gets worse. Canter wants "Zukerberg" to "do the right thing." By "do the right thing," Canter means, of course, "give away your business."

Facebook isn't the only social network over whom people are scrapping for credit as founders. Brad Greenspan, the former CEO of MySpace parent Intermix Media, disputes Brett Brewer's claim to having founded MySpace. What's more amazing is that the founder-status mention appeared offhandedly in a TechCrunch company profile — but Greenspan nonetheless found it, and left a comment. One wonders — does Greenspan have Google News set to email him an alert whenever someone uses the words "MySpace" and "founder"? At any rate, Valleywag's reinvention of the old saying remains true: success has many founders.

Back in July, I speculated that Accel Partners VC Jim Breyer might use his position on the Facebook board to strongarm startups developing Facebook apps into taking its money. And sure enough, he's setting up a new fund to do exactly that. But he's cleverly cutting in Facebook itself, as well as fellow board member Peter Thiel's Founders Fund. Facebook CEO Mark Zuckerberg announced at TechCrunch40 that his company and its two main backers are forming fbFund, a $10 million pool of money that will invest between $25,000 and $250,000 in Facebook-app startups. As hard to resist as a solo offer from Breyer might be, a check offered by Breyer, Thiel, and Zuckerberg seems irresistible. And more than a little menacing.

The Times of London has a hilarious story on the rise of a new phenomenon they dub the "Facebook Suicide," — completely deleting all your information from a social network. If this were an actual, measurable trend, it might cause some consternation in the social networking world, but, after reading the article, Silicon Valley should be relieved. All the people quoted come off like complete technophobic loons. Take 27-year-old Stephanie, who quit Facebook to save her relationship with her insecure, insanely jealous, and manipulative boyfriend, who couldn't stand to see old pictures of her on her exes' profiles. "Facebook was damaging my relationship with my boyfriend to such an extent that if I hadn't done it [deleted her profile] we wouldn't be together now," she states. "As soon as my Facebook profile died, our relationship improved." Right-o there, Steph. It's Facebook's fault that your boyfriend is an abusive control freak. But leave it to the therapists to take the whole thing way too seriously...

We're hearing whispers that Adam Bosworth, ex-Google and Microsoft engineer who created XML and the Access database, will soon join hot social network Facebook. Not 100% on this yet — Facebook PR head Brandee Barker is traveling and unavailable for comment — but the rumors seem strong and very plausible to us. If true, this sheds new light on Bosworth's swift and sudden departure from Google, where he was head of Google's beleaguered health project. The most surprising rumor is Bosworth's supposed new title: Vice President of Engineering, a position currently held by Facebook co-founder Dustin Moskovitz. Know anything more? Please fill us in.

PRWeek confirms our month-old scoop that Facebook has hired PR firm OutCast to help manage the hungry journalists seeking information on the hot social network. [PRWeek]

New friends acquired through MySpace or Facebook may as well be invisible. England's Sheffield Hallam University, studying whether social networks ease the friend-making process, has concluded that "online only" relationships are extremely shallow. It determined that 90 percent of close online connections met in real life. Well, duh. Most use networks to keep in touch with people they already know, or, perhaps, reach out to friends of friends. Who actively cultivates all those unsolicited Facebook friend requests from total strangers? (Photo by ellectric)

Looks like AOL is using Facebook's poaching tactics to recuit from Yahoo. Check out this adfrom Facebook's network for Yahoo employees.

"Here's Your Chance to Poke Martha Stewart." Expanding beyond her MySpace presence with a new Facebook profile, the home-style guru puts the "omni" in omnimedia — even if she is a little slow to join the bandwagon. [AdAge]

The Internet, despite its vast repositories of knowledge, has made us stupid. According to the Pew Research Center, Americans know less about current events now than they did in 1989. Too many distractions? Well The New York Times is looking to inform all the Web's denizens, or at least guilt them into scanning RSS headlines. It's launched a Facebook App dubbed The New York Times News Quiz. After a answering five questions based on the day's headlines, takers are awarded a "Times IQ" and ranked against their friends and collective Facebook users. Brilliant move. Even cheaters will end up learning something. No one wants to look like an idiot in front of friends.

Before the Googleplex there was a garage. Prior to Marck Zuckerberg's hip Facebook HQ, he had a dorm room. Second Life got its start in a small warehouse - now turned Moroccan furniture store — found in Linden Alley. And Craigslist? That's still basically run out of a house. Business 2.0 chief of reporters Yi-Wyn Yen goes on a photographic tour of Web startup birthplaces. If you need motivation to jump on the giant Web 2.0 bubble, check it out. And work on your coding.

"While [Facebook apps] may seem silly now," writes San Jose Mercury News reporter Dean Takahashi, "those applications could eventually become some of the most popular services on Facebook, and MySpace may have to follow." Takahashi explores the differences between the big three networks (Facebook, LinkedIn, and MySpace) and fails to determine which is best. [San Jose Mercury News]

This is from an ex-Googler who remains in Facebook's Google network. When he logged onto Facebook, guess what popped up? It's not as high-profile as, say, Microsoft's poaching suit against Google two years ago, but it's interesting to note that all the big Valley companies are feeling free to steal each other's employees.

Martha Stewart is now all up in the Facebook. [Ad Age]

Facebook still has a long way to go before overtaking MySpace as the number one social network, but the popular Facebook music application, iLike, has rapidly gained ground on MySpace with music fans. [VentureBeat]

Stanford has hopped aboard the Facebook application bandwagon with a new class: noted developer BJ Fogg and Facebook fanboy Dave McClure (who may not be employed by for Facebook but is awfully busy flacking the company) will be teaching "Create Engaging Web Applications Using Metrics and Learning on Facebook." Although offered through the computer science department, the course appears more geared to business students. Pupils will be graded based on the number of users they can garner rather than quality of code, and there will be an event at the end of the course to pitch the applications to investors. Is it any surprise Facebook moved to the west coast and that Stanford leads Harvard in incubating technology companies? As VentureBeat notes, while Stanford jumps on the latest tech fad and offers students a chance to strike it rich, Harvard ironically had admonished Facebook's creator Mark Zuckerberg and shut down a precursor to the popular Facebook for privacy violations and political correctness concerns while he was a student.