Om Malik on Facebook's Week

Om Malik weighed in on the reports earlier this week that Microsoft (or another suitor like Google) may be investing $300 million to $500 million in social networking site Facebook. While much of the commentary in the biz press thus far has focused on what such an investment means for Facebook's valuation, Malik makes a case for why he thinks Facebook might need to amass as big a war chest as possible. And it's got nothing to do with funding better advertising platforms.

New York's Attorney General Andrew Cuomo announced on Monday that his office is subpoenaing Facebook as part of an investigation into "inappropriate solicitation of underage users and inappropriate content on the site." Concerns that Facebook says it takes very seriously and will continue to address.

And it's this fight to keep the site free from sexual predators, while protecting Facebook's image in the process, that Malik is referring to when he writes, "Facebook needs money for what is clearly a big crisis facing the company...Facebook’s subpoena is going to require some serious legal resources and even more serious dough. Today it’s New York, tomorrow it could be attorney generals from any of the other 49 states. What if the European Union gets on board? Who’s going to foot the bill then? Who is going to make up for the loss of advertising revenues if the brand advertisers deem Facebook unacceptable?"

There's also the possiblity of Congress turning up the heat, a la last year's Deleting Online Predators Act (DOPA) bill.