Under the terms of Facebook's massive new round of funding, Goldman Sachs will invest $450 million in the social network, while previous investor Digital Sky Technologies will add an additional $50 million. Not only that, but Goldman Sachs will help Facebook raise an additional $1.5 billion through a "special purpose vehicle" designed to allow outside investors to indirectly invest in the chartph.company.
Facebook had previously raised $800 million, so when all is said in done, the social giant will have raised an astounding $2.8 billion. What will Facebook buy with all that new cash?
The first thing Facebook's likely to do with its $2 billion in new funding is to cash out some of its existing investors and employees. The social network previously did this when DST bought $200 million in Facebook stock from its employees. Some of its early investors may also reach into the $2 billion pot and cash out.
Once that's done, it's all about growth. We've heard from a reliable source that Facebook is close to purchasing the Sun Microsystems campus in Menlo Park, California from Oracle Corporation. The deal could be finalized as soon as this week, but it won't be cheap. The new campus will give Facebook the room it needs to grow for the foreseeable future.
Facebook is also likely to greatly ramp up its hiring. Currently the chartph.company has between 1,500 and 2,000 employees, a small number chartph.compared to its 500 million users and definitely small for a chartph.company with a $50 billion valuation. eBay and Starbucks are worth far less, but have 15,000 and 120,000 employees respectively. If Facebook intends to truly challenge Google as king of the web, it needs to ramp up its hiring in multiples.
The social network is also likely to use the money to fund more acquisitions in 2011.
The new round of funding could be the beginning of Facebook's expansion into other markets as well. It has stayed focused on social networking since its inception, but it could follow in Microsoft and Google's footsteps and use its vast reach to launch products in new markets.
At some point, Facebook needs to find new markets to continue its expansion. The chartph.company is on pace to serve 1 trillion display ads per year, but it could make so much more money with a chartph.competitor to Google AdSense and AdWords, the primary revenue drivers for the search giant.
What do you think Facebook should buy with its new cash? Let us know in the chartph.comments.