Microsoft is allegedly in talks to buy a minority stake in the popular social-networking Web site Facebook Inc., The Wall Street Journal reports. The software giant apparently approached Facebook over the last few weeks with business proposals. The WSJ sources claim Microsoft could purchase a stake of up to 5 percent in the startup, at a cost in the range of $300 million to $500 million.

The Microsoft man expected to run the company's internet business is believed to be Brian McAndrews, who was snatched by the Redmond company in the $6 billion acquisition of advertising company aQuantive Inc. last month. WSJ's sources claim there are "concerns among its executives that the maturing tech company isn't moving quickly enough to establish a broad beachhead in the online-advertising world."

Microsoft already has a partnership with Facebook, as it serves advertising on the site since 2006. It's quite interesting to remember that Mark E. Zuckerberg reportedly turned down a $900 million offer last year for Facebook, the social networking Web site he founded three and a half years ago. Now, Facebook may be valued at around $10 billion.

However, Google is expected to do something to prevent Microsoft from trying to erode its lead in the advertising market. Either way, Facebook, Microsoft and Google all declined to comment on the talks. Facebook is a private company and does not reveal its income, most of which comes from its advertising deal with Microsoft. However, the New York Times reports that earlier this year, a Pali Research analyst, Richard Greenfield, estimated that the company brought in $60 million to $96 million in annual revenue, with no real profit.

In early July, Mark Zuckerberg, was confronted with intellectual property-theft accusations, coming from his former employers from 2003. Back then, Zuckerberg apparently did some coding work for the founders of Facebook’s rivaling social network called ConnectU, whose principles of functioning are similar to Zuckerberg’s site. Cameron and Tyler Winklevoss, and their business partner Divya Narendra, are accusing Zuckerberg of stealing proprietary code from ConnectU and of later integrating that code as an original idea in Facebook.

Mr Zuckerberg has admitted that he did six hours of coding for ConnectU on a voluntary basis, but said that he thought the site was a "personals page" and not a social networking site.

Also in July, Palo Alto-based Facebook, which is the second most popular social-networking site, announced its first acquisition: Parakey, a start-up run by Blake Ross and Joe Hewitt, co-founders of Firefox. Their product was described as a platform bridging the gap between information on the web and the desktop.

In May this year at F8 conference, Facebook announced Facebook Platform, a new development platform that enables companies and engineers to integrate with the Facebook website and gain access to millions of users. Facebook was originally targeted for college students but since expanded to other age groups, now has more than 20 million users and is growing at a faster clip than MySpace.