Russian Company Gives Facebook $200M Boost

Comrades in social networking

Facebook is getting a $200 million investment from a Russian Internet investor that values the social networking company at $10 billion.

The investment gives Digital Sky Technologies a nearly 2 percent stake in the Palo Alto, Calif.-based company's preferred stock. The deal presumes the company is worth $10 billion.

The company is also planning to buy at least $100 million in Facebook common stock from common stockholders, making it possible for current and former employees to liquify their vested shares.

But, nobody from DST will sit on the Facebook board or hold special observer rights.

The estimated worth is below the $15 billion valuation implied by a 2007 investment from Microsoft Corp., even though Facebook has substantially grown since then.

However Facebook's own appraisal after the Microsoft deal gave the company a market value of about $3.7 billion, according to details revealed in a legal settlement.

The team at Facebook is, no doubt, happy with the push.

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"This investment demonstrates Facebook's ongoing success at creating a global network for people to share and connect," said Facebook CEO Mark Zuckerberg. "We've worked hard to bring more than 200 million people -- 70 percent outside of the U.S. -- onto Facebook to share with friends, family and co-workers. A number of firms approached us, but DST stood out because of the global perspective they bring - backed up by the impressive growth and financial achievements of their Internet investments. We're looking forward to working with the DST team."

DST owns Russia's most popular social networking site, Vkontakte, which looks very much like Facebook. They are also part owner of, the country's e-mail service.

Copyright AP - Associated Press
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