Facebook held “valuation conversations” with potential investors including Providence Equity Partners, General Atlantic, Bain Capital, and Kohlberg Kravis Roberts, the New York Post reports.
The conversations all stopped short of term sheets for new funding, however, because the new investors wanted to value Facebook between $2 billion and $3 billion, while the startup itself puts the number closer to $6 billion.
While Facebook is on a wicked growth streak — passing 100 million in August and then 200 million last month — people whisper that each new user costs the startup an extra dollar a year.
Boosters close to the company point out that if Facebook really needed money, it could easily adopt a strategy similar to MySpace’s by selling more visible ads. We doubt Mark Zuckerberg would ever let that happen.
“We absolutely do not need to take money,” Facebook COO Sheryl Sandbergy recently told Bloomberg TV. “We might take money, but it doesn’t mean we need to.”
Doubters remain, says the Post:
After pouring more than $400 million into the Web site, sources said existing investors are itching to see a return on investment and don’t want to be further diluted through a new round of funding.
But CEO Mark Zuckerberg is ambivalent about pursuing that route and still wants to focus on expanding Facebook’s user base and product offering, sources said.
“No one has a gun to [Zuckerberg’s] head, but there is tension,” one source close to the situation said.
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