Facebook Worth $50B from $500M Funding Round
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.