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Digital Sky Technologies, which has been busily investing hundreds of millions in American social media firms in recent months, now has a ne…

Photo: Flickr / Jawen
photo: Flickr / Jawen

Digital Sky Technologies, which has been busily investing hundreds of millions in American social media firms in recent months, now has a new backer of its own. Tencent, the big Chinese internet company, is investing $300 million in DST in exchange for a 10.26 percent stake; Tencent is also getting 0.51 percent of the voting power in DST.

The deal will link Digital Sky, which counts several major internet companies in Russia and Eastern Europe, including e-mail giant Mail.ru, among its holdings with Tencent, which also has a big presence in online communications with its ownership of QQ. The companies say the investment involves a “strategic partnership,” although they don’t provide details in their announcement.

In recent months, Digital Sky Technologies has been spending heavily in the U.S. — buying a 1.9 percent stake in Facebook for $200 million, and also leading a $180 million round in Zynga. Digital Sky Technologies says it itself had raised $1 billion in funding through 2009.

Both Tencent and Digital Sky Technologies are both reportedly bidding for AOL’s ICQ. Considering their new partnership, it will be interesting to watch whether one of the two will now pull out.

By Joseph Tartakoff

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  1. There does’nt seem to be an end to the sky high valuations social media gets!

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