A Russian internet investment company has offered $200million (£125million) for a 2 per cent stake in Facebook, in a deal which would value the social networking website at $10 billion.
Digital Sky Technologies (DST), which is controlled by Russian businessman and internet entrepreneur Yuri Milner, also said it would offer to buy at least $100 million of Facebook common stock from existing investors.
The DST offer, for 1.96 per cent, represents Facebook’s first major funding injection since 2007, when Microsoft paid $240 million for a 1.6 per cent stake in the company, valuing it at $15 billion. Since then, some investors have reportedly become frustrated at the social networking site’s reluctance to capitalise on its 200 million worldwide users. In April, the New York Post reported that the company’s private equity investors had informally valued it at only $3 billion.
Mark Zuckerberg, Facebook chief executive, said in a statement that a number of firms had approached the company, but Digital Sky stood out “because of the global perspective they bring - backed up by the impressive growth and financial achievements of their internet investments.”

“This investment demonstrates Facebook’s ongoing success at creating a global network for people to share and connect,” he said. “We’ve worked hard to bring more than 200 million people – 70 per cent outside of the US – onto Facebook to share with friends, family and co-workers.”
Despite recent public statements from Sheryl Sandberg, Facebook’s chief operating officer, stating that Facebook did not need extra cash, it can now use the money to fund its growing operations, including bandwidth, storage, and engineering costs, analysts said.
DST already owns stakes in Russia’s most popular website, Mail.ru, and has recently bought up large holdings in a host of eastern European internet companies. Based in London and Moscow, DST websites account for over 70 per cent of all page views in the Russian-speaking internet and its social networks are the market leaders in more than 13 countries, with a combined population of more than 350 million.
Contrary to initial reports that DST had demanded a seat on the Facebook board as part of the deal, Facebook said that the Russian vehicle would not be represented. Mr Zuckerberg said he expected Facebook to be cash flow positive in 2010.