Goldman Sach invests in Facebook

Goldman –Facebook news
• Goldman invests 450 mn in Facebook on its own balancesheet+1.5 bn investor money in fb, 50mn russias digital sky technologies
• Goldman reserves the right to do whatever it wants with its own investment n not b transparent with its clients abt the same
• valuation of company GS is 88bn and it will charge fees of 4.5-5% to its clients for their investments
• The deal makes Facebook now worth more than companies like eBay, Yahoo and Time Warner.
• The new money will give Facebook more firepower to steal away valuable employees, develop new products and possibly pursue acquisitions – all without being a publicly traded company.
• Y it doesn’t want to go public-quartely reports, annual meetings n other mandatory disclosures…6 yr old –very young co..generally private firms take 10-15 yrs before they go public..mark zuckerberg is jus 26yrs
• Linkedin may go public this yr…ceo and board of directors r open to it..depends on their willingness and experience to handle it…
• Controversy- Valuation of Facebook at 50bn (2bn revenue, 2000 employees- founded in 2004). This was done atleast one to 2 months ago before goldman came into picture. But goldman validated it. (FB valuation was 10bn in 2009 and its users have doubled in 1 yr…should its valuation quintuple?)
• Advertising rev growth-very strong
• Reasons y one may not buy FB
1. Facebook reached 500 million users in July. There's been no update since, even though the company had meticulously documented every new 50 million users to that point. Might the curve have crested? And let's not even talk about the fact that they don't really make much money per user — a few dollars a year at most. (Its estimated $2 billion in 2010 revenues would amount to $4 per user at that base.) I certainly haven't spent any money on the site, despite being a fairly regular visitor. And any advertiser who is trying to target me on the social network is wasting their money. But that's just me.
2. goldman self interest in validating valuation
3. games cannot sustain ad banners
4. revenues in 2010 jus 2 bn…paying 25 times of it is too high..other numbers not given out
5. warren buffet's opinion-calling it like another boom, rather invest in more than half of gs thn in fb

REf: http://finance.fortune.cnn.com/2011/01/04/five-reasons-why-im-not-buying-facebook/