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Goldman values Facebook at 50 bln dollars: report

by Staff Writers
New York (AFP) Jan 3, 2011
Social-networking giant Facebook could flex its growing might after reportedly raising 500 million dollars from Goldman Sachs and a Russian firm in a deal valuing the website at 50 billion dollars.

Goldman has invested 450 million dollars, and Digital Sky Technologies, a Russian investment firm that has already sunk about half a billion dollars into Facebook, invested 50 million dollars, The New York Times reported Monday, citing sources familiar with the deal.

Facebook and Goldman declined to comment on the report.

The investment makes Facebook worth more than fellow Internet companies eBay and Yahoo!, as well as media company Time Warner, the Times said.

"The stake by Goldman Sachs, considered one of Wall Street's savviest investors, signals the increasing might of Facebook, which has already been bearing down on giants like Google," the daily said.

The new money provides the privately held social-networking giant founded by Mark Zuckerberg more firepower to develop new resources, make acquisitions and lure away top employees as it increasingly competes more directly with Internet search giant Google.

The new investment deal could also double the personal fortune of Zuckerberg, the Times said. According to Forbes, Zuckerberg was worth 6.9 billion dollars when Facebook was valued at 23 billion dollars.

Goldman has the right to sell part of its stake, up to 75 million dollars, to the Russian firm, the Times said.

For Digital Sky Technologies (DST), the new investment means its original investment in Facebook, at a valuation of 10 billion dollars, has climbed fivefold, it noted.

DST, which is 10 percent owned by Chinese Internet portal Tencent Holdings, bought US firm AOL's instant messaging service ICQ last April.

"As part of the deal, Goldman is expected to raise as much as 1.5 billion dollars from investors for Facebook at the 50 billion dollars valuation, people involved in the discussions said, speaking on the condition of anonymity because the transaction was not supposed to be made public until the fund-raising had been completed," the Times said.

Representatives for Facebook, Goldman and DST all declined to comment, the newspaper added.

Facebook surpassed Google, the world's Internet search leader, in 2010 as the most-visited website in the United States, Internet research firm Experian Hitwise said last week.

The social-networking giant has more than 500 million active users per month worldwide, and according to comScore, saw the number of unique visits jump to 647.5 million in November, up 48 percent from a year ago.

Zuckerberg, the 26-year-old celebrity co-founder of Facebook, who recently was named Time magazine's "Person of the Year," has so far resisted pressure to launch an initial public offering of stocks.

"I think right now Facebook is not at all concerned with an IPO, they're concerned with achieving global ubiquity, getting every Internet user on the planet to become a Facebook member and getting every website in the world to integrate with Facebook technology," Lou Kerner at Wedbush Securities told AFP.

"It's quite possible that they would never go public. In my view the biggest threat to Facebook is government regulation, and that threat is greatly increased if you're public, then governments around the world have a lot more rights to look into your business."

Last month Zuckerberg and and Facebook co-founder Dustin Moskovitz joined a pledge to give away more than half their wealth to charity.



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