Facebook banked $500 million in funding from Goldman Sachs and Digital Sky, inflating its war chest to challenge Google for a greater Web audience.
Facebook CEO Mark Zuckerberg regularly downplays talk of an
IPO, but his social network company has achieved the scale, and now the funding,
of a company to warrant it.
Facebook has reportedly banked $500 million from Goldman
Sachs and Digital Sky Technologies, valuing the company at $50 billion, according to
The New York Times.
Goldman has
plunked down $450 million. Russia-based Digital Sky, which has already pumped
$500 million into Facebook, chipped in the remaining $50 million.
Facebook spokesperson Larry
Yu declined to confirm the funding, which makes the social network worth more
than Yahoo and eBay, in an e-mail to eWEEK Jan. 3.
The new
cash infusion can help Facebook hire new talent, buy more companies and accelerate
product development, particularly in mobile, where only 20 percent or so of its
overall user base accesses the Website from Web-enabled phones.
There is also
talk that Facebook wants to buy Sun Microsystems' campus in Menlo Park, Calif., from Oracle. That won't come cheap.
The
funding comes after the social network bade goodbye to a busy 2010 in which it
acquired about 10 companies, redesigned several sections of its Website and
launched several new social tools, including Facebook Groups, Facebook Places
and Facebook Deals.
The
company also significantly improved its photo quality and tagging capabilities
and integrated with VOIP (voice over IP) provider Skype.
HitWise
reported
Dec. 29 that Facebook was easily the most visited Website and most
searched term in 2010, besting Google, Yahoo and other tech luminaries
in both areas. JP Morgan's Imran Khan constructed some charts to hammer
home Facebook's growth in other areas
here.
Armed
with the new, huge chunk of funding, Facebook will be well positioned to continue
landing body blows versus Web rival Google.
Of course, the funding won't come without scrutiny. The Securities
and Exchange Commission is looking into the private stock market Internet
companies, which some believe are staying private to veil their moves from
rivals.
Facebook's funding
compares favorably to the nearly $1 billion in funding local deals Website
Groupon is said to be raising.
The new money also comes a few weeks after Twitter
confirmed it grabbed $200 million in funding from Kleiner Perkins Caufield Byers and others.
That infusion only valued the microblog at $3.7 billion, a pittance compared to Facebook's fresh valuation of $50 billion.
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