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Russians pour $200 million into Facebook

Internet investment firm will now have a 2% stake in social networking website

A Russian firm has invested $200 million in Facebook in return for a stake in the company and support for the social networking site’s continued growth.

Digital Sky Technologies (DST), which has significant stakes in Eastern European and Russian internet businesses, has made a $200 million investment in Facebook in exchange for preferred stock, representing a 1.96% equity stake at a $10 billion valuation.

The new valuation is $5 billion lower than when Microsoft invested $240 million in Facebook, in return for a 1.6% stake last year.

“This investment demonstrates Facebook’s ongoing success at creating a global network for people to share and connect,” said Facebook CEO Mark Zuckerberg said in a company statement.

“We’ve worked hard to bring more than 200 million people – 70 percent outside of the U.S. – onto Facebook to share with friends, family and co-workers. A number of firms approached us, but DST stood out because of the global perspective they bring – backed up by the impressive growth and financial achievements of their internet investments. We’re looking forward to working with the DST team,” Zuckerberg added.

DST is run by its three partners - Yuri Milner, ex-CEO of Mail.ru, a top Russian language website; Gregory Finger, previously head of the Moscow office of NCH, a multi-billion dollar hedge fund; and Alexander Tamas, previously co-head of internet and software coverage in EMEA for the Investment Banking Division of Goldman Sachs.

Zuckerberg also told media at the Reuters Global Technology Summit last week that he hopes to eventually take Facebook public but added that he is in no rush to do so.

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