Digital Sky Technologies, a Russian investment firm that recently purchased a 2% preferred stock stake in the Facebook social media company is looking to acquire an additional $100 million in common stock shares. The $200 million agreement in May of this year valued Facebook at approximately $10 billion.
The deal this week for current and former Facebook employees is offering $14.77 per common stock share which carries a lower valuation of $6.5 billion. This is not to say that Facebook is now valued at $6.5 billion, rather that common stock does not offer the same privileges and guaranties for shareholders as preferred stock. “If the Facebook employee has been locked up several years, it’s a good opportunity for them to sell some shares and get some liquidity,” says Stuart Campbell, a lawyer with Davis Wright Tremaine LLP in Seattle who focuses on startups.
Facebook board member Marc Andreessen last week stated he expects company revenues to reach $500 million in 2009.
Rival platform MySpace finally lost traction to Facebook in the United States this May based on comScore traffic statistics. Facebook has been the number one social network in the world for over a year now.
Source: Bloomberg
Facebook board member Marc Andreessen in a Reuters interview stated that he anticipates the social networking giant to reach $500 million in 2009 and billions more in five years. “There’s every reason to expect in my view that the thing can be doing billions in revenue five years from now,” Andreessen said.
The core source of Facebook’s revenue is engagement advertising however the company has been actively exploring alternative revenue streams such as virtual currency as a way of monetizing Facebook applications.
Andreessen also made news this week announcing a new $300 million technology venture capital fund with partner Ben Horowitz. The new VC firm appropriately named Andreessen Horowitz will focus on startup companies targeting the Internet, cloud computing, software, networking, and related industries.
Recently Facebook reportedly turned down $200 million in funding at a generous valuation of $8 billion because of the stipulation that a board of directors seat come along with the deal. Mark Zuckerberg is serious about keeping control of the board which he currently holds three common stock seats, one for himself, one for Marc Andreessen (co-founder and chairman of Ning) and the last of which is currently empty.
The latest financial projections from Facebook show that the company estimates revenues of $550 million in 2009, nearly double their 2008 revenue of $280 million. While some consider these estimates to be a stretch, they most likely attributed to the $8 billion valuation in the recent offer (still a far cry from last round’s $15 billion valuation).
Source: TechCrunch
