We didn't know much about Russian investment firm Digital Sky Technologies before it invested $200 million in Facebook this spring. But it's been in the news a lot more recently: Russian newspaper Kommersant reported Thursday that the firm has purchased more Facebook stock, sending its stake in the massive social network past 5 percent at a $10 billion valuation. Its original stake was 1.96 percent. It's reportedly still looking to buy more.
A Facebook representative told CNET via e-mail that because it's a private company it opts not to discuss shareholder percentages.
According to the Russian-language publication (first referenced in English by Quintura), DST's increased stake comes from its offer to purchase employee stock as part of the buyback program announced this summer. It's continued to pay $14.77 per share, Kommersant added. But if DST's stake is indeed over 5 percent now, it's purchased far more than the $100 million originally stipulated in Facebook's terms (its total stake is now over $400 million, according to Kommersant).
That's not all DST has been up to. Earlier this week, social gaming company Zynga--arguably the most profitable company to grow out of Facebook's developer platform--announced that DST had led a $180 million funding round designed to "fuel Zynga's growth and...facilitate liquidity for employees and investors." It's a "passive investor," meaning that it will not take a seat on the company board.
"Our earlier investment in Facebook and now in Zynga underscores our premise that social networking and social entertainment will define the next generation of the web," DST head Yuri Milner was quoted as saying in a release from Zynga.
Additionally, earlier this month another Russian newspaper reported that DST was in talks to acquire ICQ, an instant-messaging service that AOL is looking to sell off.
This post was updated at 7:56 a.m. PT with comment from Facebook.
Facebook employees and investors can now sell some of their stock to Digital Sky Technologies, the Russian investment firm that infused $200 million into the social network this spring.
Part of the deal at the time of the investment would be that Digital Sky Technologies would buy back up to $100 million in common stock from shareholders whose shares have vested.
Now, Digital Sky Technologies is purchasing stock at $14.77 per share, which assumes a valuation of about $6.5 billion for Facebook, according to Brad Stone of The New York Times, who first reported the news. That's lower than the $10 billion valuation at which DST originally invested, as well as the $15 billion at which Microsoft invested $240 million in the fall of 2007. But those two figures are considered to be preferred-stock valuations, not paper valuations.
But $6.5 billion is still a higher valuation than a few months ago. Before DST's investment brought some order to Facebook's internal stock trading, an employee at a firm that brokers privately-traded stock told CNET News that some Facebook employees, frustrated that they had not yet had a chance to cash out stock through an acquisition or an initial public offering, were looking to unload stock at a valuation well under $3 billion.
That sort of trading was difficult for Facebook to control. With the DST investment, employee stock sales became more official and easily regulated.
"While individuals must make their own decisions about participating in this program, I'm pleased that the price DST is offering is much greater than the price originally considered last fall," Facebook founder and CEO Mark Zuckerberg said in a statement. "This is recognition of Facebook's growth and progress towards making the world more open and connected."
On the flip side, the relatively low valuation may mean that Facebook employees will be more reluctant to sell to DST. Some may prefer to hold out for the possibility of an acquisition at a higher valuation, or wait until Facebook goes public--something that always seems to be just off the horizon.
Facebook's valuation has been one of the most talked-about numbers in Silicon Valley, especially as the company (reportedly) toys with the idea of an IPO. There were rumors that Zuckerberg had rejected funding that would value the company at $4 billion, shortly after legal documents from the ConnectU vs. Facebook trial revealed that the company then valued itself at $3.7 billion.
And Facebook can look forward to be even more front-and-center in the gossip industry's crosshairs: the alleged tell-all about the social network's origins, Ben Mezrich's "The Accidental Billionaires," hits stores on Tuesday.
A month after announcing his resignation from PC World magazine, tech journalism veteran Harry McCracken has announced a new venture: Technologizer, an online destination for general technology news and analysis.
John Battelle, founder, Federated Media Publishing
(Credit: Courtesy of John Battelle)The new site will be launched later this summer in conjunction with advertising start-up Federated Media Publishing; founder John Battelle is himself a veteran of the tech press, having co-founded Wired magazine and founded The Industry Standard in the 1990s.
Federated will also work to develop the site, in addition to providing ads, much as it did for Boing Boing Gadgets and Webb Alert. Technologizer will join the company's "Tech Federation" division alongside blog powerhouses such as TechCrunch and GigaOM.
(Credit:
Caroline McCarthy/CNET Networks)
Here you go: the rest of New York's Digital Technology Week, both the official and the unofficial. The Silicon Alley Insider, by the way, has a great list of some stuff going on around the city on Tuesday night that I missed in my earlier recap, involving Diggnation and a Natalie Portman nude scene. W-T-F, Wes Anderson?
WEDNESDAY, SEPT. 26
-- 11:30 AM ET: Guitar Hero III is unveiled in an event space near Times Square. It's invite-only, but knowing these things, some of the PR will spill out into the streets of midtown.
-- 8 PM ET: Tune into ABC to see if Mark Cuban got voted off Dancing with the Stars.
THURSDAY, SEPT. 27
-- 8:00 AM-5:30 PM: Digital Media Wire's Millennials Conference at Scandinavia House
--1:00 PM-7:00 PM ET: The big event of the week, the DigitalLife
-- 7:00 PM ET: Center Networks holds a mixer for the Web 2.0 crowd at the For Your Imagination studios.
FRIDAY, SEPT. 28
-- 8:30 AM-4:00 PM ET: Ypulse Tween Mashup conference at the Jacob Javits Convention Center
-- DigitalLife continues at the Javits Center (11:00 AM to 7:00 PM)
SATURDAY, SEPT. 29
-- 12:00 PM ET: The Mega Meetup in Brooklyn's Prospect Park-- a confluence of multiple New York-based Meetups to celebrate the Scott Heiferman-founded site's fifth anniversary.
-- DigitalLife continues at the Javits Center (11:00 AM to 7:00 PM)
SUNDAY, SEPT. 30
-- DigitalLife wraps up at 6:00 PM ET.
-- 6:00 PM ET: Most bars in the city are going to be open for quite a while longer. Go have fun. And if you're underage, go play Halo 3 instead.
(Credit:
Caroline McCarthy/CNET Networks)
With the DigitalLife Expo, several other conferences, and a whole bunch of tech press from all over the place in town, it's rather fitting that the municipal government has decided to designate September 24-30 as "Digital Technology Week." But because this is New York and we're used to weekends that start on Wednesdays, the tech hubbub really starts, well, tonight. So get that workday wrapped up!
FRIDAY, SEPT. 21
-- 6PM ET: Startup Weekend kicks off at Polytechnic University in Brooklyn
SATURDAY, SEPT. 22
-- 3 PM ET: OneWebDay lecture in Washington Square Park, featuring Wikipedia founder Jimmy Wales, Rocketboom founder Andrew Baron, NYCWireless' Dana Spiegel, and more.
-- 10 PM ET: OneWebDay and iCommons party at For Your Imagination studios
-- Startup Weekend continues at Polytechnic University
SUNDAY, SEPT. 23
-- Startup Weekend wraps up at Polytechnic University
MONDAY, SEPT. 23
-- 8 AM ET: MIXX 2.7 expo, held by the Interactive Advertising Bureau and part of the city's Advertising Week, kicks off at the Crowne Plaza Times Square hotel
-- 6:30 PM ET: The monthly Web 2.0 Social Networking Tech Meetup at Slate Plus bar (54 West 21 St.) Sun Microsystems is sponsoring and providing refreshments
-- 6:30 PM ET: NewTeeVee's first-ever New York "Pier Screening" hosted by Om Malik et al. -- RSVP required
-- 8 PM ET: It's wholly unrelated to Technology Week, but this is when gazillionaire entrepreneur Mark Cuban will make his first appearance on Dancing with the Stars
TUESDAY, SEPT. 25
-- 12 AM ET: Halo 3 hits shelves. New York's official launch party is at the Best Buy at 29 5th Avenue
-- MIXX 2.7 and Advertising Week continue
We'll post Wednesday the 26 through Saturday the 29 in a few days. Chances are, more opportunities to mingle with fellow nerds will surface.
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