Facebook announced this morning via a release that Russian investment group Digital Sky Technologies had purchased a 1.96 percent stake in the company for $200 million, putting a $10 billion valuation on the social network. Digital Sky’s interest had first been reported Friday by the WSJ. Digital Sky is also offering to purchase $100 million of Facebook common stock held by existing shareholders.
Even in the face of the economic downturn, Facebook says it expects revenues to increase 70 percent this year and that it will be cash-positive by 2010. But the new cash can provides a nice cushion should the recession drag on to fund the company’s expensive growth. Zuckerberg said during a call it also opens the possibility of “strategic options” — possibly a veiled reference to Facebook buying another company. Earlier this year, Facebook said it was searching for a CFO with public company experience, but Zuckerberg appeared to downplay the possibility of an IPO coming soon. “We view this as one milestone along the way,” he said. “It’s not something we are really rushing towards. We don’t see it as being on the immediate horizon.”
Zuckerberg said a number of investment firms had approached the company, although Digital Sky “stood out because of the global perspective they bring – backed up by the impressive growth and financial achievements of their internet investments.” Digital Sky is an investor in several social networks in Russia and Eastern Europe and Facebook has seen much of its growth recently outside the United States. Zuckerberg said he was particularly interested in working with Digital Sky to look at how the social networks in its portfolio were using different models, including micropayments, to monetize their audiences. However, Digital Sky will not receive a seat on Facebook’s board.
For months now, Facebook had been rumored to be on the lookout for new funds to buy back employee stock and finance the lease of new servers, although COO
Cheryl Sheryl Sandberg insisted earlier this month that the company did not need to raise additional money.