SAN FRANCISCO (MarketWatch) -- Court documents have revealed an internal valuation at Facebook Inc. far below the $15 billion cited publicly at the time of Microsoft Corp.'s investment in the popular social networking site, reflecting its immense strategic value in the eyes of the software giant.

A document filed June 13 as part of a lawsuit brought by founders of ConnectU Inc. against closely-held Facebook describes a "formal valuation resolution" approved by Facebook's board of directors that valued its stock at "only one quarter of its apparent value based on Facebook's public press releases," or roughly $3.75 billion.

At the time of Microsoft's MSFT, -1.04% $240 million investment in Facebook last year, the companies said publicly they would be put toward a financing round that valued Facebook at $15 billion. See related story.

The value of Palo Alto, Calif.-based Facebook, a company widely expected to offer shares to the public at some point and become Silicon Valley's next big success story, has been at the heart of ConnectU's case.

Details of the June 13 filing were reported Thursday in the online edition of the New York Times.

ConnectU's founders had sued Facebook and its CEO Mark Zuckerberg for allegedly stealing the premise and source code for the company from them. ConnectU eventually reached a settlement agreement with Facebook, but later unsuccessfully sought to disengage itself from that settlement.

Valuations of privately-held companies like Facebook, however, can be extremely subjective, as they are based on multiple factors and have relatively small groups of investors.

Microsoft's investment at a $15 billion valuation therefore could be seen as justifiable for a number of reasons, including the in-depth look it now gets at ways online advertising works -- or doesn't work -- on one of the most popular sites on the Internet. In addition, Microsoft was also keen to keep Facebook out of the hands of powerful rivals such as Google Inc. GOOG, +0.32%

Google has a similar relationship with Facebook rival MySpace, which is owned by News Corp. NWS, -3.57% MarketWatch, the publisher of this report, is also a News Corp. property.

A Microsoft spokesman declined to comment.

Microsoft is in the midst of an ongoing struggle to bolster its online services and advertising presence in an effort to counter the dominance of Google.

Microsoft's desire to counter Google was behind the its ultimately unsuccessful attempt to acquire mutual rival Yahoo Inc. YHOO. Microsoft has since offered to acquire only Yahoo's search unit, while other strategic investments or limited acquisitions are also reportedly being discussed. See related story.