Facebook value plummets $5bn
The Russians will save us... bitch
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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. ®
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COMMENTS
Well sooner or later evryone was going to get bored with facebook!!!!!!!!!!
http://www.digitaldirect.co.uk/
re: face book hating
It's not that I hate face book; in fact I could really give a crap less, but seriously, what is it actually good for than a cheap form of entertainment? Furthermore, from the business perspective, what tangible product do they sell that generates all of this money, they're supposedly bringing in, hand over fist?
It's nothing more than a slightly more interactive version of google, where they appear to embed your content with both legit and illegit advertisements. Some of the quizzes are essentially scams, because unless you read the fine print in the terms and conditions, you can wind up giving the developer of those quizzes full access to your fb profile, which includes access to your credit card (should you be dumb enough to supply it).
As another poster stated, facebook really doesn't have a clear business model that they adhere to. If they do, they're doing a mighty fine job of keeping it secret or they've just been incredibly lucky to at the right place at the right time. Hence the problem... the vast majority of the internet using public is very fickle. What's cool for a year or so ago isn't a year or two later... Even if it is "for free", which is why I believe it's only a matter of time before facebook starts heading the way of my space, geocities, angelfire and other earlier attempts at social networking.
Why all the hate?
Facebook is mildly useful, and can be customised enough to hide a lot of the nonsense. At the end of the day, it's free and you only have to be involved as much as you want to be, so I don't see why it deserves all the hate.
Still, facebook is worthless in a monetary sense.
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