Steve Ballmer, the Microsoft chief executive, believes that the craze for individual social networks such as Facebook risks being exposed as a “fad”, an admission that places questions over the software giant’s mooted interest in the website.

“I think these things [social networks] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people,” Mr Ballmer told Times Online yesterday.

The remarks follow reports last week that the Microsoft boss, who has committed himself to stir up Microsoft’s lacklustre share price by extending the group’s online presence, is weighing up taking a stake in Facebook that could value the social networking site at $10 billion (£5 billion).

Mr Ballmer would not comment on Microsoft’s talks with Facebook but did suggest that he could see value in the Facebook brand and the “network effects” – or community – the site has built up by accruing more than 40 million users in the three years since it start.

BACKGROUND

• Microsoft’s chief sees the future is advertising

• EBay admits to bad call on Skype

• Facebook targeted over child safety

• Facebook passes MySpace in the UK

• Microsoft mulls attraction of Facebook

Are social networking sites a bad investment?

The success of sites like Facebook is leading to a investment frenzy but the inevitable shakeout is likely to be brutal

• Terror no excuse for intrusion

BACKGROUND

• Yahoo tests new social network

• Facebook suicide: the end of a virtual life

• How to hide on Facebook

• Does Facebook's privacy policy stack up?

• Facebook shrugs off privacy fears

Imaginary friends

In reality, we have no more than eight people in our lives who we can call 'real friends'

Related Links

• Microsoft’s chief sees the future is advertising

• Can Facebook be worth $10bn?

• Facebook talks may value site at $10bn

However, he added that there was little in the way of technology to justify the lofted valuation attached to a site expected to achieve revenues of only $150 million this year.

“There can’t be any more deep technology in Facebook than what dozens of people could write in a couple of years. That’s for sure,” he said.

It is understood that Microsoft has held early talks to pay as much as $500 million for a 5 per cent stake in Facebook, which was named last week as the most popular social network in the UK by Netratings, the research group, passing MySpace for the first time.

A move by Microsoft for the current belle of the internet ball would almost certainly trigger counter interest from a clutch of rivals including Google, the leader in search advertising, and Viacom, the media giant, analysts said.

Mr Ballmer also noted that sites such as Geocities, an online community that was bought for $3 billion by Yahoo! in 1999, at the height of the dot-com boom, “had most of what Facebook has.”

Geocities has since passed out of favour.

Betting that his site will not meet the same fate, Mark Zuckerberg, 23, the founder of Facebook, has mooted a valuation of $15 billion but so far has insisted that Facebook will remain independent.

Mr Zuckerberg is understood to have rebuffed approaches last year from suitors including Yahoo!, which is thought to have offered about $1 billion.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive