Goldman Invests $50 Billion Valuation in Facebook

Facebook has raised $500 million from Goldman Sachs and Digital Sky Technologies in a deal that values the company at $50 billion. The deal makes Facebook now worth more than companies like eBay, Yahoo and Time Warner. Apparently the Goldman investment will enable the company's most wealthy clients to "get in" before an IPO and […]

Facebook has raised $500 million from Goldman Sachs and Digital Sky Technologies in a deal that values the company at $50 billion. The deal makes Facebook now worth more than companies like eBay, Yahoo and Time Warner. Apparently the Goldman investment will enable the company's most wealthy clients to "get in" before an IPO and virtually guarantee that Goldman is the firm (or the lead firm) that takes Facebook public when that eventually happens.

So far, Facebook's ceo, Mark Zuckerberg, has brushed aside the possibility of an initial public offering or a sale of the company.

The new money will give Facebook more firepower to steal away valuable employees, develop new products and possibly pursue acquisitions -- all without being a publicly traded company. The investment may also allow earlier shareholders, including Facebook employees, to cash out at least some of their stakes.

As an aside, SEC has begun an investigation into the trading of private company shares, including Facebook, Twitter, the gaming site Zynga and LinkedIn, an online professional networking site.

There has been an explosion in user interest in social media sites. Groupon also just raised a gigantic funding round, between $500 million and $950 million according to reports. Within the past 12 months there have been other massive rounds of more than $100 million at companies such as Zynga and Yelp.

Facebook is reportedly making about $2 billion annually (run-rate) on advertising. But it's serving almost 25% of all US display ads.

Representatives for Facebook, Goldman and Digital Sky Technologies all declined to comment.

[tags]venture,capital,sec,groupon,zynga,ipo[/tags]

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