Facebook finds powerful 'friend'

09:08, January 05, 2011      

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Facebook has raised $500 million from Goldman Sachs and Russian investment firm Digital Sky Technologies in a deal that values the world's top social networking company at $50 billion, Reuters reported Monday, citing a source close to the matter.

The firms also plan to raise at least $1 billion in additional funding for Facebook, the source told Reuters.

Facebook and Goldman Sachs declined to comment on the report, both Reuters and AFP said.

Digital Sky Technologies' co-Founder Yuri Milner, a 49-year-old Russian, had recruited analysts from Goldman Sachs and Morgan Stanley to help him pick investments in startups such as Facebook and the social network game developer Zynga, Bloomberg reported Tuesday.

Groupon, a DST-backed, daily deals website, announced plans last week to raise $950 million in new funding, adding to the more than $175 million it previously raised.

Twitter said last month it had raised $200 million in a funding that valued it at $3.7 billion, bringing its total amount raised to $360 million, according to the Wall Street Journal.

In Facebook's latest investment round, Goldman Sachs will plug $450 million into the company, while DST will invest $50 million, according to the New York Times.

The new money would make the privately held Facebook, founded in 2004 by Mark Zuckerberg in his Harvard University dormitory room, worth more than US aerospace giant Boeing ($48.7 billion) and media company Time Warner ($36 billion), according to AFP.

Goldman Sachs also made an arrangement that let its clients buy Facebook equity worth as much as $1.5 billion, Bloomberg reported. However, the plan may prompt US regulators to inquire whether the social networking site is circumventing disclosure rules, securities lawyers said.

Zuckerberg, 26, recently named Time magazine's "Person of the Year," has resisted pressure to launch an initial public offering (IPO) of stocks.

By raising money from private investors, Facebook can reap many of the benefits that traditionally require undertaking an IPO without facing the added scrutiny of the public markets, Jeremy Liew, managing director at venture capital firm Lightspeed Venture Partners, told Reuters.

The fast-growing, social-networking website claims more than 500 million user accounts worldwide.

According to comScore, the number of unique visits to the website jumped to 647.5 million in November, up 48 percent from a year ago.

Source: Global Times
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