Facebook to Get $500 Million in Goldman-led Investment

A couple of years ago, Microsoft invested $240 million in Facebook, giving the young company a jaw-dropping $15 billion valuation. But now the New York Times is reporting that Facebook is getting $500 million more from Goldman Sachs and Digital Sky Technologies. Here's the stop-and-gulp part: the reported investment would value the company at $50 billion.

Facebook CEO Mark Zuckerberg: More reason than ever to smile

$50 billion.

Goldman's putting up $450 million while Digital Sky is accounting for the remainder, according to the Times' account. Chalk it up as another brilliant Goldman move as the bank moves to the front of the line in the (likely) event that Facebook goes public. The fees from any prospective Facebook IPO would easily cover the Goldman investment - and probably then some. And Goldman apparently also managed to get a special deal for its special clients. From the report:

"In a rare move, Goldman is planning to create a "special purpose vehicle" to allow its high-net worth clients to invest in Facebook, these people said. While the S.E.C. requires companies with more than 499 investors to disclose their financial results to the public, Goldman's proposed special purpose vehicle may be able get around such a rule because it would be managed by Goldman and considered just one investor, even though it could conceivably be pooling investments from thousands of clients."

Assuming, of course, that the SEC goes along with the sweetheart arrangement. In the meantime, though, the deal further testifies to Facebook's accelerating emergence as the hottest Internet property around - with some of the deepest pockets this side of Bill Gates.

Kicking in $450 million of its own money into the deal, Goldman, Wall Street's premier investment firm, is only underscores the obvious. Indeed, the research firm Experian Hitwise says that Facebook was the most visited Web site in 2010.

  • Charles Cooper On Twitter»

    Charles Cooper is an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.

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