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Digital Sky Invests $200 Million In Facebook

May 26, 2009

Facebook announced the purchase of a 1.96 percent stake by Russian Internet investment firm Digital Sky Technologies for $200 million on Tuesday.

The recent purchase suggests that the value of the Palo Alto, Calif.-based social networking firm is at $10 billion.

“This investment demonstrates Facebook’s ongoing success at creating a global network for people to share and connect,” Facebook chief executive Mark Zuckerberg said in a statement.

“A number of firms approached us, but DST stood out because of the global perspective they bring — backed up by the impressive growth and financial achievements of their Internet investments. We’re looking forward to working with the DST team.”

DST has previously invested in Russian Web properties such as Mail.ru and Vkontakte.ru. Its investments add up to more than $1 billion in among more than 30 companies since its beginning in 2005.

DST intends to buy up to $100 million of common stock in Facebook from existing stockholders “that would facilitate liquidity for current and former employees’ vested shares in the company,” Facebook said in a statement.

“Our investment experience in other regions reveals the tremendous value social networking companies create as they redefine how people communicate and interact,” said Yuri Milner, chief executive of DST.

“By every important metric — user growth and engagement, technological innovation and financial performance — Facebook is on a similar trajectory, though on a much more global scale.

“We’re delighted to invest in Facebook, Mark and his management team as they make the world more open and connected.”

According to the Associated Press, the new deal falls short of the $15 billion valuation suggested by a 2007 investment from Microsoft Corp.

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