Ka-shing! Facebook Gets Another Cash Infusion
By
Anders Bylund
December 4, 2007
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Social-networking phenom Facebook has a new investor. Hong Kong tycoon Li Ka-shing now owns 0.4% of the operation, in exchange for a $60 million wad of cash. The price is consistent with the terms of Microsoft's (Nasdaq: MSFT) earlier and larger stake, valuing Facebook as a whole at $15 billion.
The very aptly named Ka-shing is one of the 10 richest men in the world, according to Forbes -- not far behind Microsoft chairman and founder Bill Gates. He worked his way up through plastic flowers and real estate, and now controls a keiretsu-style conglomerate with its fingers in nearly every piece of the Hong Kong pie. He's also a well-known philanthropist, with a frugal lifestyle that invites comparison to the Oracle of Omaha, Berkshire Hathaway's (NYSE: BRK-A) (NYSE: BRK-B) Warren Buffett.
So is this another one of Mr. Ka-shing's soon-to-be-famous business moves, or an act of corporate philanthropy? Time will tell, but Facebook certainly has the look of a hungry young success story. News Corp. (NYSE: NWS-A) (NYSE: NWS) chairman Rupert Murdoch -- another really rich guy -- is watching the usurper grow larger in the rearview mirror of his MySpace division. He might be wondering whether he bet $580 million on the wrong horse in the social-networking derby.
Then again, Murdoch thinks he could turn around and sell MySpace for upwards of $12 billion today. But before you start thinking that there are no losers in this game, consider the failure of Google (Nasdaq: GOOG) and its Orkut alternative. Let me put it this way: Even though Google runs its own social-networking platform and they have been known to enjoy their own dog food, more than 7,300 members have ventured over to Facebook's semi-official Google network.
Facebook has deep-pocketed backing now, and it's starting to figure out how to make some money of its own. So will somebody like Microsoft or Yahoo! (Nasdaq: YHOO) dig deep and buy the whole thing eventually, or is this another IPO waiting to happen? I'd bet the latter. Godspeed, Facebook -- and ka-ching!
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