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Microsoft Chief Executive Steve Ballmer defended his company's purchase of a 1.6 percent stake in social network Facebook for $240 million.

"We didn't make a mistake," Ballmer told reporters at a business conference in Mumbai. "The valuation of Facebook is still to be determined. Certainly today, it's very, very popular. So for a company like ours that wants to be a pre-eminent presence in this space, it's very important for us," Ballmer said.

On how much Facebook is worth Ballmer said, "Will Facebook be worth $5 billion, $15 billion or $50 billion some years down the line is really up to their team and how they take it forward," according to Reuters.

Ballmer said last month that Microsoft was concentrating on making smaller purchases of $50 million to 1 billion annually instead of larger deals. When questioned about possibly acquiring Yahoo he said, "My answer is a considered 'no comment'. We want to succeed in the online advertising space. What happens with Yahoo, we'll all have to wait and see."