Facebook 200 Million

Russian investment group Digital Sky gets 2% stake in Facebook. Investment values social networking site at $10 billion.

Facebook has been looking far and wide to find investors that are willing to inject this amount of capital to the firm but there are too many scepticals that are unsure of the company's valuation.

For example Microsoft invested 250 million for a 2.5 share hold of Facebook valuating the company at 15 million. This was a year ago and now we can see that the company's value is supposed to be 10 million.

The key question here is... What is the vale of these type of companies and how do we accurately valuate them? there has been a buzz about making users of websites like facebook (web 2.0) to pay for it s that the companies become more profitable.

I feel as though evaluating a social networking site's value would be easier than any other type of company. The fact that they are not selling anything means that they are not influenced by the state of the economy, and they are very insulated from swinging fads by now. Having all of the data about peoples locations and their connections to friends would make it easy enough to calculate the clustering coefficient of Facebook. I imagine the clustering coefficient is pretty large, meaning that it is very unlikely that people will switch to another "social networking" site. I am probably not considering something, but it seems to me that investing in Facebook would be a rather safe investment.