According to today’s New York Times,

Some people laughed at Mark E. Zuckerberg when he reportedly turned down a $900 million offer last year for Facebook, the social networking Web site he founded three and a half years ago.

But Microsoft, Google and several funds are considering investments in the fast-growing site, according to people with knowledge of the talks, that could give the start-up a value of more than $10 billion.

While discussions were still in the early stage, these people said that Microsoft was considering an investment of $300 million to $500 million for a 5 percent stake of the company. Google is also said to be interested in an investment.

Facebook’s valuation could go even higher as the two rivals create the kind of competitive bidding situation that has recently driven the acquisition prices of other start-ups into the stratosphere.

Representatives from Facebook, Microsoft and Google all declined to comment on the talks.

Er, that’s $10 billion for an outfit that, according to one analyst quoted in the Times story, brought in $60 million to $96 million in annual revenue, with no real profit.

Later: It’s interesting to see the rationalisations being offered for this valuation — and why Microsoft and Google might want Facebook. Here’s one for example:

“There’s a lot of strategic value beyond the pure financial value in an investment like this,” said Jeremy Liew of Lightspeed Venture Partners, who closely watches Web investments. Liew, a former executive at AOL, said social networks like Facebook and MySpace are encroaching on the turf of portals like Microsoft’s MSN to serve as users’ home page.

“There’s not a lot of a zero-sum games, but there’s only one home page,” Liew said. “There’s only one thing that is the first thing you see” when signing on to the Internet. “That’s what I think is the strategic value, and I think Microsoft needs it more than Google.”