Facebook Takes $200 Million From Russian Investors At $10 Billion Valuation

http://mediamemo.allthingsd.com/20090526/da-facebook-takes-200-million-from-russian-investors-at-10-billion-valuation/

by jasonlbaptiste • 17 years ago

29 31 17 years ago

mediamemo.allthingsd.com

TweedHeads• 17 years ago

$10B Overvaluation.

There fixed.

bkbleikamp2• 17 years ago

If their revenue projections are accurate, then $10bb is not that crazy. They also have 200 million users and each user has some value - though I have no idea what it is.

And I know people will say "but they're not accurate with their projections." If you were projecting revenue or growth for your start up you'd be saying the same things Facebook says to their investors, showing the numbers that make your case. You cannot blame them for the valuation when investors seem to agree. No one is forcing them to invest.

edmccaffrey3• 17 years ago

Since Microsoft was probably willing to pay a premium to keep other advertising platforms out, the drop from $15 billion doesn't seem that bad for them. Earlier investors probably bought in at a value below $10 billion.

pj2• 17 years ago

Anyone seen Training Day?

staunch• 17 years ago

Zuckerberg better not kill one of his Russian investor's guys in Vegas or he's going to get ventilated.

graemep• 17 years ago

One of the major shareholders in the Russian company is known as "the hard man of Russia" , and has an interesting past:

http://www.craigmurray.org.uk/archives/2009/05/convicted_bla...

http://www.marketwatch.com/story/facebook-indirectly-obtains...

ahoyhere2• 17 years ago

In Soviet Russia... oh, cripes, it's not even fun any more. I'm going home.

raheemm• 17 years ago

There was a minor mention about micropayments by the Russian investor and the way Zuckerberg changed subjects seems to give credence to such plans. If they have some kind of payment system in the works - it could be possibly interesting in so far as providing an alternative to paypal. More likely it would also strengthen the FB platform.

edmccaffrey3• 17 years ago

I think they can make a ton of money there. First, allow devs to sell apps just like on Xbox Live and phone app stores. Secondly, require as policy that any program bound by the SDK license will only use Facebook's payment system to charge users for anything. Open this payment system up to people who need to collect small payments unrelated to Facebook; many of their customers will already have a Facebook account--it's like Facebook Connect but more useful.

tomjen• 17 years ago

Except that the primary users of FB are twenty somethings who generally aren't that willing to spend money on stuff online.

Besides the biggest customer of any micro-payment system is going to be the newspapers (that may or may not work for them, but they will try it), but how many old people are on facebook?

alex_c• 17 years ago

If they have some kind of payment system in the works - they definitely do, they were talking to platform developers about it a year ago (requests for feedback, NDAs, etc.)

I'm surprised they haven't moved faster with it. Sure, it could be vaporware, but given that it's a pretty obvious direction to go in, I really doubt it.

ahoyhere2• 17 years ago

Serious comment:

I'd say $10b is redonkulous because that is a buy-out price, and I highly doubt anyone will buy them at that.

Their plan seems to go public and let everyone buy into them, instead. But I really don't think Facebook going public could in any way be good for the users, with fiduciary responsibility and all.

While Facebook may or may not be "on the outs," the fact is that if people begin to really suspect Facebook is doing something heinous with their data, they will leave.

And that is pretty much the inevitable result, because what kind of company (which pretends to be so large) will be able to convince all its shareholders that doing heinous things with the data - to make money now for this quarter - is a terrible idea?

Right now, a user on Facebook represents no value to them, unless they buy digital goods.

physcab2• 17 years ago

“We’ve worked hard to bring more than 200 million people – 70 percent outside of the U.S. – onto Facebook to share with friends, family and co-workers."

70% outside the U.S? Yikes. So that means 70% of it's users cannot be monetized. Good show Zuckerberg...what do you have up your sleeves...

ryanwaggoner• 17 years ago

Yeah, no startups anywhere else in the world are monetizing their users.

ruslan2• 17 years ago

We do monetize our users directly, 99% of them don't come from US. And I have to tell you the truth: it's incredibly difficult to sell to ppl in US. If you cannot provide $10 support for every dollar you take from your US customer he/she will not buy it and will request immediate refund. With such an attitude, we do prefer to reject payments made using US credit cards/paypal accounts to save our time and money. C'est la vie.

chollida12• 17 years ago

> 70% outside the U.S? Yikes. So that means 70% of it's users cannot be monetized.

How did you come to this conclusion.

J_McQuade• 17 years ago

I think the logic may have gone like this:

"If it ain't got no dead president on it then it ain't no damn money!"

I like to avoid giving credence to any negative stereotypes of Americans, but sometimes the internet makes that so very, very hard.

physcab2• 17 years ago

It's been primarily speculative, but many people have suggested that Facebook's Ad platform works because American companies can easily target Americans because they know something about the market they're trying to hit.

I'm probably wrong in my assumptions, but I would think it would be pretty difficult for some targeted ads to work in foreign countries. I don't have a bias or anything, I'm just summarizing the feeling I've gotten from reading numerous reports online.

Here's a thread about how Facebook's costs are growing: http://news.ycombinator.com/item?id=445630

dchest• 17 years ago

The title of this pages says: "Confirmed: Twitter Gets Backing From Russian Investors."

Edit: no longer.

kmavm• 17 years ago

Something to consider, for those saying $10b is too much to pay: maybe these investors know something material that you don't? After all, those about to sign a humongous check probably get better access to the financials of a privately run company than, say, the media.

jonknee• 17 years ago

Eh, you'd be surprised. Bad deals happen all the time and are sometimes quite obvious. eBay's multi-billion dollar mistake in Sykpe for example. Not to say that this will turn out to be bad, but just because billions are on the line doesn't mean they have a bunch of awesome secrets.

timae• 17 years ago

strike "maybe" and "probably" and I agree. Your point is a good one, DST is clearly in a better position to assess value than you and me (and say, the media).

blhack• 17 years ago

In other news: home appraisers are much better at judging the value of your home than common sense is.

This is why your 2 bedroom shack on the wrong side of town can be worth $500,000

/bitter Phoenician

olefoo• 17 years ago

Putting this together with the recent banning of Facebook in Iran gives me a reason why someone might be willing to pay $200 Million for access to the ear and the analytics of what is quickly becoming the prime forum for political activism in many demographics. Indeed it doesn't have to be be particularly sinister since much of the world does not share the fastidious illusion of the necessity of separating Politics and Business.

ruslan2• 17 years ago

What a waste of money! I wish DST better invest in Russian high-tech and internet startups, there are some very decent. I think for $200M they could buy completely all of them as founders in Russia are very cheap ($1M considered to be very good investment).

Facebook Takes $200 Million From Russian Investors At $10 Billion Valuation

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