Digital Sky Technologies invests $200M in Facebook
Facebook has announced that Digital Sky Technologies (DST), one of the leading internet investment groups globally with significant stakes in Eastern European and Russian internet businesses, has made a $200 million investment in Facebook in exchange for preferred stock, representing a 1.96 percent equity stake at a $10 billion valuation.
In addition, DST has indicated that it is planning to offer to purchase at least $100 million of Facebook common stock from existing common stockholders that would facilitate liquidity for current and former employees’ vested shares in the company.
About Facebook
Founded in February 2004, Facebook’s mission is to give people the power to share and make the world more open and connected. Anyone can sign up for Facebook and interact with the people they know in a trusted environment. Facebook is a privately held company and is headquartered in Palo Alto, Calif.
About Digital Sky Technologies
DST was founded in 2005 and is the largest internet investor in the Russian-speaking and Eastern European markets and one of the leading investment groups globally to exclusively focus on internet and internet-related companies. DST is a privately held holding company backed by leading Russian and Western financial institutions. DST has offices in Moscow and London. For more information please visit http://www.dst-global.com.
Here is what some of the industry analysts say about this investment, “Facebook hasn’t yet learned to earn money, and there are delusions in the market about growth potential for these social networks. Digital Sky became a victim of such a delusion.”
My Question is Will Facebook and its other rivals Twitter, MySpace etc will be able to match the profits of their Internet predecessors?
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I agree with the analysts. There is a lot of hype behind social networks and it will be interesting to see when and how these companies plan develop their revenue model.