Will Costly Options Hurt Facebook?

Microsoft's recently purchased stake in Facebook may make it harder for the social networking site to hire talented employees, reports the Wall Street Journal. By selling a 1.6% stake for $240 million, Facebook increased its valuation to $15 billion, in turn radically increasing the cost of stock options, which are a vital part of many Silicon Valley compensation packages.

Stock options allow employees to buy shares of their companies at a preset price; the lower the price, the greater the potential profit, and the more appealing they are as a non-cash part of a compensation package. The higher options price could hinder Facebook's plan to double its staff in the next year, although other companies valued in the billions have still managed attract new recruits. (More Facebook stories.)