Some of the world’s biggest internet companies are bidding for stakes in social networking site Facebook.

Microsoft is said to be in talks to buy a five per cent share for up to $500m (£250m); Google is expected to join the race; and Yahoo made an unsuccessful $1bn (£500m) proposal last year.

The rush to acquire a piece of the online collaboration site is partly explained by its current success.

Figures for August show Facebook for the first time overtaking MySpace – the rival site owned by Rupert Murdoch’s News Corporation – with more than 6.5 million users compared with the 6.4 million on MySpace.

But Facebook is not only a consumer phenomenon. One in five of the country’s entire internet population use it and chief information officers are looking at ways to make it work for business.

Sales and marketing will be a major growth area, according to Tim Parlett, chief technology officer of peer-to-peer money lending site Zopa.

And because Facebook’s application programming interfaces (APIs) are available, it is easy for firms to build links to their corporate sites.

“These mini applications sit inside Facebook, acting as a funnel or a hook into a company’s own site,” said Parlett.

“But because it is working through an API, the Facebook user doesn’t have to leave the application and open a new browser window or tab to get there.”

Betfair, the online betting exchange, is looking at the potential to exploit the site in its communications with customers.

“We have not found the answer yet, but we are definitely looking to develop our own community with the framework that Facebook offers,” said Betfair chief information officer Rorie Devine.

Social networking sites are already causing a stir for businesses. Some are blocking employee access because of concerns about time-wasting. Some, particularly in the financial services sector, are banning it for security reasons.

Deutsche Bank is an exception. It already has 500 employees on Facebook and is keen to consider using the site to complement existing customer contact processes, said global technology chief operating officer Daniel Marovitz.

“We are talking with our suppliers about Facebook and similar technologies in relation to our client relationship management systems,” said Marovitz.

There is also significant potential to use social networking methods to improve
internal communications, between individual employees and between different areas of the business.

Within a few years Facebook could become a standard tool to supplement existing enterprise-oriented collaboration systems, said Gartner research director Ray Valdes.

“Enterprise Facebook would allow visibility into information previously locked up in silos to support business processes,” said Valdes.