Facebook comes knocking...

It looks like AMD may not be the only technology company receiving major investment from the Gulf. Social networking site Facebook is rumoured to be in talks with Dubai International Capital over a possible cash injection

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By  Mark Sutton Published  November 4, 2008

It looks like AMD may not be the only technology company receiving major investment from the Gulf. Social networking site Facebook is rumoured to be in talks with Dubai International Capital over a possible cash injection.

Being the world's most popular social networking site is an expensive business, and Facebook has already gone through Microsoft's $235 million stake from this year and a similar amount last year. Servers and storage and power account for most of the costs, as the company struggles to keep up with demand from its ever-expanding user base.

So would Facebook be a good investment for DIC? The company does need to properly monetize its services, but it's a functional, useful site, not a white elephant. Although there's some backlash as users start to think a little harder about privacy issues, the site is still gathering new users, especially outside of the US. The audience for Facebook is huge, probably too big for a new contender to make a lot of difference to market share, and while the company will have to work out how to make advertising work where online advertising is not as established, or possibly start charging for premium services, it's not about to become a new dotcom bubble casualty. And given the appetite in the Gulf for investing in brands I think it highly likely that DIC might decide to invest

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