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Facebook coining it: report

Jan 03 2011 16:59 AFP

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New York - Facebook has raised $500m from US investment bank Goldman Sachs and a Russian firm in a deal that values the social-networking website at $50bn, The New York Times reported on Monday.

The investment makes Facebook worth more than fellow Internet companies eBay and Yahoo!, as well as media company Time Warner, the newspaper said, citing sources familiar with the deal.

"The stake by Goldman Sachs, considered one of Wall Street's savviest investors, signals the increasing might of Facebook, which has already been bearing down on giants like Google," the daily said.

Under the terms of the deal, Goldman has invested $450m, and Digital Sky Technologies, a Russian investment firm that has already sunk about half a billion dollars into Facebook, invested $50m, people involved in the talks told the Times.

The new money provides the privately held social-networking giant founded by Mark Zuckerberg more firepower to develop new resources, make acquisitions and lure away top employees as it increasingly competes more directly with Internet search giant Google.

Goldman has the right to sell part of its stake, up to $75m, to the Russian firm, the Times said.

For Digital Sky Technologies, the new investment means its original investment in Facebook, at a valuation of $10bn, has climbed fivefold, it noted.

"As part of the deal, Goldman is expected to raise as much as $1.5bn from investors for Facebook at the $50bn valuation, people involved in the discussions said, speaking on the condition of anonymity because the transaction was not supposed to be made public until the fund-raising had been completed," the Times said.

Representatives for Facebook, Goldman and Digital Sky Technologies all declined to comment, it added.

Facebook surpassed Google, the world's Internet search leader, in 2010 as the most-visited website in the United States, Internet research firm Experian Hitwise said last week.

The social-networking giant has more than 500 million active users per month in the world, and according to comScore attracted 647.5 million unique visits in November, a jump of 48% from a year ago.

The new investment deal may double the personal fortune of Zuckerberg, the Times said. According to Forbes, Zuckerberg was worth $6.9bn when Facebook was valued at $23bn.

goldman sachs  |  mark zuckerberg  |  facebook
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