The Economist isn’t impressed by the huge valuations currently being placed on Facebook. Neither am I.

Update: In the end, Microsoft valued Facebook at $15 billion.

Microsoft has paid $240m for a 1.6% stake in Facebook that values the hugely popular social networking site at $15bn.

Facebook spurned an offer from Microsoft’s rival Google, which was also keen to invest the site.

Microsoft will also sell internet ads for Facebook outside the United States as part of the deal that took several weeks of negotiating.

What’s surprising is how small the Microsoft stake is. This has to be about advertising rather than investment.