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Facebook value to reach $50 billion after Goldman Sachs investment

by Jorge Hernandez on January 3, 2011

After Goldman Sachs and an unnamed Russian investor put $500 million into the popular social networking website Facebook, the company is now believed to be valued at around $50 billion. The deal makes Facebook worth more than eBay, Yahoo and Time Warner, The New York Times reports.

The decision by Goldman Sachs to invest in Facebook emphasizes the growing importance of the website. It seems that 2010 was an important year for the social networking giant. despite that fact that chief executive Mark Zuckerberg battled the fall out from a less-than-favorable portrayal in The Social Network, Facebook surpassed the $500 million user mark and was the top visited website of the year.

The deal may also force Facebook to go public, especially as the Securities and Exchange Commission has begun an investigation into the private market for shares at companies such as Facebook, Twitter and LinkedIn. Still, the investment, coupled with Groupon's effort to raise around $950 million marks the economical relevance of these online endeavors.

"When you think back to the early days of Google, they were kind of ignored by Wall Street investors, until it was time to go public," Chris Sacca, an angel investor in Silicon Valley, told the Times. "This time, the Street is smartening up. They realize there are true growth businesses out here."

The transaction has yet to be completed, but those close to the situation said that Goldman plans to create a "special purpose vehicle" that will allow its clients to invest in Facebook without having to disclose their financial results to the general public. The investment will be good news for the 26-year-old Zuckerberg, whose net worth has already been estimated at an astonishing $6.9 billion. Experts say that could reach around $15 billion if the plans go through.

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