Russian Firm Invests $200 Million in Facebook

Facebook has sold a 1.96 percent stake to Russian investment firm Digital Sky Technologies for $200 million.

The cash infusion gives the social networking giant an assumed worth of $10 billion, Facebook said. That’s a third lower than it could boast in 2007, when Microsoft forked over $245 million for a chunk of the company in deal that also made it Facebook’s exclusive third-party ad seller.

The investment from DST also brings Facebook new ties to shareholders in some of the largest Web companies in Russia and Eastern Europe. These include Russian portal Mail.ru, which offers free e-mail, games, and instant messaging services; social networking companies Forticom and vKontakte; and Astrum Online, a publisher of multiplayer online games.

CEO Mark Zuckerberg said several firms approached Facebook, but DST stood out for its global perspective and for the growth of its social networking and other Web investments.

“DST has developed real experience and insight into the power of social networks, and the value they can create for investors,” Zuckerberg said today on a conference call discussing the investment. DST’s partners will not join Facebook’s management or its board.

DST partner Yuri Milner, who was previously CEO of Mail.ru, said the success of the firm’s portfolio companies in Eastern Bloc countries has been driven by a combination of business models — including both advertising and micro-payments such as those that occur when a user buys a virtual gift for a friend.

For Facebook, advertising continues to drive revenue growth, but Zuckerberg said he believes virtual goods and other types of paid services could easily surge.

“We’ve tested and are continuing to test a number of things with payments. It’s not a large part of the business so far, but we think that it could be at some point in the future,” he said.

While Facebook’s current $10 billion valuation is considerably down from its peak two years ago, it’s not as low as some had expected. Recent rumors had it that CEO Zuckerberg and the Facebook board were offering new investment stakes that would place the company’s worth at an approximately $8 billion.

Under the terms of the deal, DST may acquire an additional $100 million of common stock from existing shareholders. That sale would “facilitate liquidity” for employees’ vested shares in the company.

Zuckerberg also suggested Facebook could use the cash to acquire other firms.