A Russian Internet company announcedtoday that it will be investing $200 million in Facebook, valuing thesocial network–which has yet to turn a profit–at roughly $10 billion.In 2007, when Microsoft invested $240 million in the startup, it wasvalued at $15 billion. Facebook’s internalvaluation pegs the company ataround $3.7 billion in worth.
Valuing companies isn’t anexact science; there are hard numbers involved (revenue) and soft ones,too (brand value). The real answer could only come with an IPO, whichfounder Mark Zuckerberg said Tuesday is not something they company isgoing to do in the near-term, according to the AP. Clues to thecompany’s worth lie in its its balance sheet, which is kept undisclosedas long as Facebook is private.
Zuckerberg has claimed thatFacebook will grow its revenue by 70 percent in 2009, but most expertssee that predictionas quixotic, and doubt the site will be able to getmuch past 20%, or $300 million more this year. Yuri Milner, CEO ofDigital Sky (seen below), the Russian company that announced itsinvestment today,said his companywould also be buying an additional $100 million of common stock in thePalo Alto company. Digital Sky owns a popular social network in Russiacalled @mail.ru.
The internal valuation figureleaked from the ConnectU-Facebook lawsuit last year; to tally up whatConnectU’s founders thought they deserved, its lawyers managed to gettheir hands on Facebook’s “formal valuation resolution,” a valuerequired to appraise the options a company gives its employees, underIRS Section 409(A). $3.7 billion was the number on that document. Butsince we don’t know how much stock has been issued–and what kind–it’sstill tought to put a real value on the company. What’s guaranteed:Facebook will be facing stiffcompetition from other platformsthis year, making its rosy revenue projections even moreunlikely.