Is Facebook really worth $10 billion?

A Russian technology company is offering social networking giant Facebook a $US200 million investment that would value the company at around $US10 billion. The Wall Street Journal has reported that Digital Sky Technologies, an internet investment company, has offered the funding in a two-part deal that would see it buy between $US100 million and $US150 […]

Patrick Stafford 26 May, 2009

A Russian technology company is offering social networking giant Facebook a $US200 million investment that would value the company at around $US10 billion.

The Wall Street Journal has reported that Digital Sky Technologies, an internet investment company, has offered the funding in a two-part deal that would see it buy between $US100 million and $US150 million in Facebook common stock.

The investment would place Facebook’s stock value at $US6.5 billion, which combined with the preferred stock would put the company’s total value at around $US10 billion.

DST currently owns the largest website in Russia, “Mail.ru”, and a Polish social networking site. The business is run by Russian entrepreneur and investor Yuri Milner.

According to reports, Milner is seeking a seat on Facebook’s executive board as part of any deal. But Facebook founder and chief executive Mark Zuckerberg has previously turned down investment deals based on the investors’ demands for board positions.

The deal would likely rely on buying up stock currently owned by Facebook employees, and would require several workers to consider selling their shares.

Facebook has refused to comment, saying in a statement: “Facebook is a private company, so as a matter of policy, we don’t typically share details about our financial plans or comment on rumor and speculation”.

It is uncertain whether Facebook has replied to the company, but the news comes after Zuckerberg said the site is not necessarily on the prowl for new investors.

“If there’s an investment to be done on very good terms, we will consider it if for no other reason than to have more buffer if we want to do something in the future,” he said at the Reuters Global Technology Summit.

Zuckerberg also said that an initial public offering for the site was still “a few years out

Any acceptance of funding would by the first since a deal with Microsoft in 2007, which sent the value of Facebook’s preferred stock to about $15 billion.

Recently the site has faced challenges in finding new funding, and even postponed a scheme that would see it buy back shares from employees after it failed to locate investors to fund the plan.