Facebook held a conference call at to announce it sold 1.96% of the company for $200 million to Russian tech firm Digital Sky Technologies, setting the startup’s valuation at $10 billion. We took notes, and you can read them below.
- Facebook likes DST because many of its portfolio companies found a way to make money off micropayments.
- Advertising is Facebook fastest growing business right now, but if the company found a bigger revenue stream elsewhere, that’d be fine, says Mark Zuckerberg.
- Mark confirmed that Facebook is working on video chat.
- Facebook doesn’t want to sell the kind of interruptive ads that its competitors sell.
12:46, Just some classy, strings-based hold music for now.
12:49, The operator is on, saying we’re starting soon. Phew. Worried we had the wrong number for a minute there.
12:53, The call is starting. Facebook CEO Mark Zuckerberg, top communications guy Elliot Schrage and DST CEO Yuri Milner are on the line. Elliot takes the phone.
12:54, Facebook COO Sheryl Sandberg is on the line remotely.
12:54, Here’s Mark. He thanks everyone from around the world for joining.
12:55, “Despite a pretty tough economic enviroment revenue is up.”
12:55, Our advertising products are evolving. Big brand advertisers are seeing good results. Tens of thousands of smaller advertisers are also using the system.
12:56, Our philosophy on financing is that we’re open to it. DST has an interesting portfolio of investments, including Mail.ru. “We found their thinking an leadership very impressive.” Alexander comes from Goldman and Yuri was CEO of Mail.ru.
12:57, Facebook has no plans for the cash-cushion yet, but it’s “nice to have the flexibility.”
12:57, Here’s Yuri Millner. The team is delighted, he says. Background on DST: The largest Internet investor in Russian and eastern European markets. They own 70% of all pageviews on the Russian Internet.
1:00, “Social networks fundamentally change the way people connect and commuincate.”
1:00, Lots of pleasant generalities…
1:02, Reporter wants to know how this effects the IPO.
1:03, Mark says we’re not rushing toward one, since an IPO is just one milestone in Facebook’s long-term plans.
1:03, CNN reporter asks how much DST’s follow-on investment values the company. Mark says we’re not announcing that yet, but will over the summer.
1:05, Reuters reporter asks how this impacts the Microsoft deal from 2007 that kind of, sort of set Facebook’s value at $15 billion. Mark says that its important to remember that deal was also about ads and search. He wants to point out that relative to the economic conditions and how that was a strategic deal, we feel really good about the progress we’ve made.
1:06, “That was more of a strategic partnerships with a lot of different components.” Basically, Mark is trying to say: This isn’t a down round.
1:08, Michael Learmonth asks about foreign growth and advertising. Yuri takes the line and says both advertising and micropayments will make money.
1:09, Advertising are Facebook’s big revenue generators right now, but DST portfolio companies do well with different types of models. “Overtime, we expect to build out a large number of these things.”
1:10, Mark: A couple months ago, we felt people outside the company were underestimating our position. So we announced our revenue growth was 70% y/y ,that we were EBIDTA profitable for 5 straight quarters, and we would be cash-flow positive in 2010.
1:12, A reporter asks about micropayments. Yuri says the Google business model is all about a wide number of free searches and just a few that make all the money. This is what we see in our part of the world in social networks. A small amount of services that people pay for.
1:13, Why is Facebook trying to buy back employee stock? Because we’re trying to work for the long-term and want to reward employees now.
1:16, We ask if any of Facebook’s current revenue models will be their long-term revenue geneator. Mark answers: I think long-term there will be many business. There is more than one kind of advertising. Also, advertising is the part of the business that’s growing the quickest. But that doesn’t mean that’ll be the only model long term.
1:18, We ask why Facebook doesn’t run bigger, splashier brand ads like some of its competitors. Mark answers: Our approach with this that the best way to serve the advertisers is to create a product where people are interacting with advertisers the same way they do with their friends, not in the old-fashioned interruptive way.
1:20, Sheryl answers, too: Facebook works with 70 of the 100 largest advertisers around the world. Our ads are specifically designed for the Facebook environment. She says this is an advantage.
1:23, Reporter asks: Did you just take the investment with the highest valuation? Mark answers: No, they’re a unique, knowledgeable partner.
1:25, Reporter asks if this is the biggest or first foreign investment in Facebook. Mark *basically* says you can find that out by Googling it, but he dodges the question because to answer it would probably be improper.
1:26, Will Facebook be taking any more investment? We have a buffer and won’t be looking for it, says Mark.
1:26, Mark confirms that Facebook is currently testing a video chat feature.
1:26, Elliot takes the line and we’re done.