Will Facebook backer Digital Sky Technologies go public before Facebook? The Russian internet investment group, which has accumulated a five percent stake in the social network, has hired Goldman Sachs, along with two other investment firms, to explore an IPO next year, according to a report in the WSJ. If the company does file for an IPO, it could give the public the opportunity to own part of Facebook, and several other high-profile internet companies, albeit indirectly. Facebook itself has said repeatedly, including most recently last week, that it is in no rush to go public.
Digital Sky spent a reported $400 million buying up Facebook stock last year, and followed up that investment by leading huge rounds at what are arguably the two hottest internet startups right now, Zynga and Groupon. It also beat out several other bidders to buy IM service ICQ from AOL (NYSE: AOL) for $187.5 million in late April.
The company’s own ownership structure has shifted in recent months. South African media corporation Naspers took a 28.7 stake in Digital Sky in July in exchange for cash and a stake in Russian e-mail service Mail.ru, which Digital Sky now completely controls. Tencent, the big Chinese internet company, also invested $300 million in Digital Sky in April in exchange for a 10.26 percent stake. All in all, the company says it has raised more than $1 billion in funding. The WSJ says Digital Sky has a $4 billion valuation.
— A little irony? Digital Sky CEO Yuri Milner and partner Alexander Tomas have both said very publicly that companies should be cautious when they consider going public. A choice quote from Milner in December on the topic of whether Zynga should go public: “When it