The New York Post reports that Google is currently leading Microsoft in the quest to win a 5-10% stake in Facebook for $500 million to $1.5 billion (depending on what exorbitant pre-money valuation Facebook gets). According to the Post's source at Microsoft, however, Redmond is "willing to give any valuation possible" to keep Google from nabbing a stake in the hot social networking startup.

It's hard not to take the NY Post story with a grain a salt, though, given that Post reporter Peter Lauria has been quite wrong about this type of rumor before. Both Google's and Microsoft's interest in Facebook is based on the potential for a large amount of advertising dollars that can be made in social networking. Microsoft has often been presumed to be the front-runner, given their current advertising deal with Facebook. Either way, one of these companies seems like to invest a large amount of money in the social network.

Facebook, meanwhile, seems to have plans of their own in the advertising realm. The company will be making an announcement to advertisers about what they're calling "a new way of advertising online" on November 6th in New York. Radar Online is reporting that Facebook has already invited an impressive list of companies to be "Landmark Partners" at $300,000 a pop to help launch the new system. The list includes Cond?© Nast, Nike, Apple, Sony, General Motors, Coke, CBS, Chase, and Verizon.

If Lauria is right, we should find out soon: the Post reports that an announcement about a Facebook investment from either Google or Microsoft should come within the next 24-48 hours.

Image: Scott Beale / Laughing Squid

UPDATE: It's now confirmed that Microsoft won the deal, over Google.