Feeds

Facebook value plummets $5bn

The Russians will save us... bitch

Designing a Defense for Mobile Applications

Facebook has sold 1.96 per cent of itself to a Russian technology investment firm for $200m.

That puts Facebook's ostensible value at $10bn, a $5bn drop from the price tag Microsoft put on the company in October 2007.

On Tuesday, Facebook announced that Digital Sky Technologies (DST) - which owns Russia's largest website, Mail.ru - made a $200m investment in its social networking dream in exchange for preferred stock. This is the company's first major funding since Microsoft's moment of Onanism.

According to a recent analysis by Data Center Knowledge, Facebook is spending somewhere between $20m and $25m a year on data center space alone. And as of the beginning of November, unnamed sources said the company was spending "well over" a million a month on electricity and "likely" another $500,000 for bandwidth, as shameless social networkers post billions of photos and other solipsistic pixels.

Meanwhile, it's unclear how much revenue the company is pulling in via advertising. According to The New York Times, chief executive Mark Zuckerberg says that Facebook’s revenue is growing 70 per cent year-over-year, and he's confident the company will be cash-flow positive in 2010. But its costs are surely growing at a rapid rate as well. The site received 307 million visitors in April, three times the number it received a year ago.

Zuckerberg said that DST's investment will "serve as a cash buffer to support our continued growth, allowing us to scale".

Digital Sky also plans to buy at least $100m of Facebook common stock from existing stockholders to provide liquidity for current and former employees with vested shares in the company.

Microsoft's $240m payout for a 1.6 per cent share of Facebook came before the worldwide economic meltdown, and at the time, Redmond was desperate to fight off an investment from arch-rival Google. As part of the deal, Microsoft became the exclusive third-party advertising platform partner for Facebook and began selling ads for Facebook both in the US and abroad. ®

The smart choice: opportunity from uncertainty

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.