Russian DST Invests Into Facebook At $50B Valuation
Digital Sky Technologies, the Russian investment company that holds a share in many world leading internet properties, has apparently invested into Facebook at a $50B valuation according to New York Times. The company has also the right to increase its ownership by $75 million at the same valuation by buying shares from Goldman Sachs. The agreement is bundled into the investment of $450 million into Facebook by Goldman Sachs.
According to the article by New York Times, sources close to the negotiations spoke on the condition of anonymity as the deal also holds a task of further raising $1.5B in funds by Goldman Sachs. Digital Sky Technologies has invested about half a billion dollars into the company at lower valuations, further increasing its ownership in the company.
Although Facebook is not releasing any figures on its sales, analysts expect the company to generate about $2 billion in revenue annually. It is also believed the company is profitable. Facebook has not stated any plans to go public, which would give the company the possibility to be valued at a more liquid market. However, the anonymous sources state that Facebook's board has signalled plans to file for an IPO in 2012.
So what is Facebook going to do with all that cash? Other than continuing to keep it free.
BTW it surprises me how the home/profile page has suddenly seen a rise in display ads.
Sardar, that's a very good question. If the company is profitable already - why does it need 1.5 billion dollars in cash. If it plans to hire more developers and sales people (my guess), it's going to do that in a very rapid pace if the profitability isn't going to follow...