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Facebook Gets Yet Another Valuation

A Russian Internet company announced today that it will be investing $200 million in Facebook, valuing the social network–which has yet to turn a profit–at roughly $10 billion. In 2007, when Microsoft invested $240 million in the startup, it was valued at $15 billion.

A Russian Internet company announced
today that it will be investing $200 million in Facebook, valuing the
social network–which has yet to turn a profit–at roughly $10 billion.
In 2007, when Microsoft invested $240 million in the startup, it was
valued at $15 billion. Facebook’s internal
valuation
pegs the company at
around $3.7 billion in worth. 

Valuing companies isn’t an
exact science; there are hard numbers involved (revenue) and soft ones,
too (brand value). The real answer could only come with an IPO, which
founder Mark Zuckerberg said Tuesday is not something they company is
going to do in the near-term, according to the AP. Clues to the
company’s worth lie in its its balance sheet, which is kept undisclosed
as long as Facebook is private. 

Zuckerberg has claimed that
Facebook will grow its revenue by 70 percent in 2009, but most experts
see that prediction
as quixotic, and doubt the site will be able to get
much past 20%, or $300 million more this year. Yuri Milner, CEO of
Digital Sky (seen below), the Russian company that announced its
investment today,
said his company
would also be buying an additional $100 million of common stock in the
Palo Alto company. Digital Sky owns a popular social network in Russia
called @mail.ru.

yuriThe internal valuation figure
leaked from the ConnectU-Facebook lawsuit last year; to tally up what
ConnectU’s founders thought they deserved, its lawyers managed to get
their hands on Facebook’s “formal valuation resolution,” a value
required to appraise the options a company gives its employees, under
IRS Section 409(A). $3.7 billion was the number on that document. But
since we don’t know how much stock has been issued–and what kind–it’s
still tought to put a real value on the company. What’s guaranteed:
Facebook will be facing stiff
competition
from other platforms
this year, making its rosy revenue projections even more
unlikely. 

See Facebook’s official press
release on the DST investment here.

[Via AP
and NYTimes]

About the author

I've written about innovation, design, and technology for Fast Company since 2007. I was the co-founding editor of FastCoLabs.

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