Umm yah Microsoft only owns a 1.6% stake in FaceBook. FaceBook crushing Microsoft's online services would do a lot of damage to Microsoft. EA owned more of UbiSoft then Microsoft owns of FaceBook yet you didn't see EA sitting back and taking it easy on UbiSoft do you?

Fact is owning such a small share in your competitor doesn't mean your competitors success will benefit you much at all. Microsoft also owns shares in Apple so should they not create a competitive device to I-Pod, I-Phone, Apple TV?

FaceBook is a direct competitor and so is Google. Right now Microsoft is working with FaceBook against Google but both companies are stealing viewers and users away from Microsoft. Without a much larger stake in FaceBook its not in Microsoft's best interest to loose market share to FaceBook.

Microsoft has invested small amounts into social networking before. however each time they failed to fully invest or throw their might behind the sites. No integration of Windows etc...

As for the idea that Windows services are already integrated, they are but their is no single hub for all of them. Also the OS is not integrated with all of them. Full integration of all their online services from X-Box Live profiles to Windows Live profiles to Windows Phone's and Windows OS as well as all the other services. Right now MSN is the closest thing to a hub but it could be greatly improved and doesn't integrate all the services Microsoft has to offer.

If they did they would charge you $10 a month for services that should be free.

If they did that it doesn't matter how great the service is it would never be able to compete with FaceBook. But it does sound like something they would do sadly!

They already kind of have one with XBL

Simple answer. No.

Long answer. No, because with Xbox Live they already have a great social community/network. What they need to do is simply keep expanding the features and options of this service, move it to Windows 8 in the future like they will, combine it with the universal gaming service that has been rumored from MS, and voila.

They can't compete with Google in the search field, how could they possible compete with Facebook, Google, and probably thousand of other (smaller) parties in the social field? I don't think MS has really been able to create any hit services anyway (excluding XBL and that's at least partly because there isn't any competition on the same console).

No no no no no no, I hate those things, and the more we have competing the worse they get and we all know how MS likes to advertise I do not want MSes facebook being advertised all over gaming sites, they use those videos that pop out of nowhere and autoplay, it was so annoying when halo reach launched.

I disagree. What MS is doing is bringing all the features and even games of Xbox Live, Xbox 360, etc accessible from your PC. Having the ability to do all the media operations, including the new Live TV services, and stream games through their universal (buy once, play on all platforms) gaming service they are working on would be a huge selling point.

A paid multiplayer service on PC? No, they wouldn't pay for just that.
A paid online/social/gaming/entertainment/cloud/mobile/universal/etc service on PC? Yes, I believe quite a few if not most people would be up for this.

They have mySpace, Its so vintage Its The Hipster thing for the moment.

It would work simply for the fact that anyone with XBL due to owning a 360 would be able to use it on the PC. There's your userbase right there.