Investment values Facebook at $10 billion

Facebook has received a $200 million investment, which values the company at $10 billion.

That may be setting a few folks, calling social-networking a fad, back on their heels today.

Heels or not, Facebook CEO Mark Zuckerberg has created the biggest social network in the world and Russia's Digital Sky Technologies is happy to pay $200 million for just under two percent of the company.

"A number of firms approached us, but DST stood out because of the global perspective they bring," Zuckerberg said today in a press release.

DST gets preferred stock for the investment and plans to buy at least $100 million in Facebook common stock from existing common stockholders. The company will not have a seat on Facebook's board of directors or hold special observer rights, the release said.

"Our investment experience in other regions reveals the tremendous value social networking companies create as they redefine how people communicate and interact," said Yuri Milner, chief executive of DST. Based in London and Moscow, DST invests in Internet and social networking companies in 13 countries.

Facebook has received more than $400 million in equity investments from venture capital firms Accel Partners and Greylock Partners, Peter Thiel's Founders Fund and Microsoft (MSFT), Bloomberg News reported.

Facebook, which makes money by selling ads on its site, could already be profitable, Silicon Alley's Nicholas Carlson wrote today. The DST investment "is about buying more time for those plans to develop."

Agreed. Facebook doesn't have enough revenue to seriously consider an initial public offering, although investors would certainly bite if there was one. The DST investment, though, may get other "big investors off their butts," Carlson wrote, and motivate them to invest in Facebook, because they won't want to be left out of the action.

Now the Facebook valuation bar has been raised to $10 billion, which gives it a higher market value than Starbucks (SBUX), the Bloomberg story said. Mission accomplished by Zuckerberg.

Anthony Massucci is a senior writer for DailyFinance. You may follow him on Twitter at hianthony.
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