Facebook value slumps by a third

Facebook has sold a two per cent stake to Russian investor Digital Sky Technologies for $200m it was announced yesterday. The deal values the privately held social-networking giant at only $10bn - two-thirds of what it was worth 18 months ago. Then it sold a 1.6 per cent shareholding to Microsoft for $240m, putting a $15bn price tag on the company

Mark Zuckerberg, who founded Facebook in 2004, said the company's worth had fallen as a result of "changes in the economy" and that the fund-raising was carried out to fund growth.

However he denied that the sale was an indication the company might be looking to carry out a full-scale public share offering. In April it was reported that some of the group's private equity investors were valuing it at just $3bn.

Zuckerberg said DST was chosen to become a partner because of the internet specialist's outlook: "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."

As part of his own strategy he said that Facebook is due to turn cash-flow positive by next year and that he is considering charging its 200m users for some of its services. The plans come in the wake of reported investor frustration that the site was slow to capitalise on its subscribers.

WHAT THEY ARE SAYING
Amanda Andrews, Daily Telegraph: "Facebook remains tight-lipped on how much it generates in advertising revenues, although it appears that new revenue streams need to be found to monetise the service. However, if the social network wants to justify its $10bn valuation - which arose following Tuesday's acquisition of a 1.96pc stake by Russian investor Digital Sky Technologies for $200m – it will need to show it is more than advertising reliant."Jessi Hempel, on CNNMoney.com: "Digital Sky partner Alexander Tamas says he believes Facebook is worth every cent of the $10bn valuation. He says he flew to Palo Alto for his first meeting with Chief Executive Mark Zuckerberg several months ago and walked away certain Facebook would be the most important global Internet company...He'd better hope he's right about Facebook's primacy: After all, he has more than $200m riding on it."
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