Goldman Sachs investment says Facebook is worth $50bn

Or so the BBC (and the Financial Times and New York Times) seem to think.

Top investment bank Goldman Sachs (the global economy’s version of Paddy Power) has stuck a load of its own money into Facebook stock (or options) at a valuation for the whole company of around $50bn.

According to the BBC this is more than Ebay or Time Warner is worth. About the same indeed as UK bank Lloyds which will probably make £4bn profit this year.

Here’s the Beeb’s story:

Facebook has reportedly raised funds from Goldman Sachs and a Russian investor in a deal valuing the social networking site at $50bn (£32.3bn).

The New York Times said that Goldman was investing $450m in Facebook, and Digital Sky Technologies another $50m.

The paper, citing unnamed sources, said the terms of the deal implied a value for Facebook of just over $50bn.

Goldman’s involvement could also raise speculation that Facebook might float on the stock market.

The Financial Times also reported that Goldman was investing $375m in Facebook, with Digital Sky putting in $75m.

A Facebook spokeswoman told the BBC that the company was not commenting on the New York Times story. Goldman also declined to comment.

If valued at $50bn, Facebook is worth more than eBay and Time Warner.

The fresh investment is expected to be used to fund develop of new products and possibly make acquisitions, the New York Times said.

It may also enable Facebook employees and early investors to cash in some of their stakes.

The paper said the Securities and Exchange Commission (SEC) was looking at the growth in the private market for trading in companies like Facebook, Twitter, and LinkedIn.

Regulators are concerned that, with this private market booming, companies are able to circumvent public disclosure requirements.

Further scrutiny by the SEC could help push Facebook towards a public listing, although the company’s founder, Mark Zuckerberg, has denied there are plans for a flotation.

So it looks as though Facebook will float on the Nasdaq exchange in New York early this year and, if it does, it’s a racing certainty that it will use some of that money to go shopping for other companies in the sector.

2011 could be the year of Facebook taking over from Google as the big bad predator.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.