Digital Sky deal values Facebook at $10 billion

27 May 2009

Russian Internet-investment group, Digital Sky Technologies, (DST) has invested $200 million in the world's largest social-networking service Facebook for a 1.96-per cent stake through preferred stock.

This is the second time Facebook has raised major equity funding after Microsoft acquired a 1.6-per cent stake in Facebook for $240 million in October 2007 (See: Microsoft pips Google to acquire a stake in Facebook)  valuing the company at $15 billion.

The transaction values Facebook at $10 billion.

The valuation of Facebook at $10 billion sems high in the current global economic downturn, compared to Microsoft's $15-billion valuation of an investment of $240 million in 2007 for a 1.6-per cent stake.

The differences between the two valuations, implies a loss of valuation  of $5 billion since the earlier valuation in 2007, despite its rising user base.