The NY times is reporting that Goldman Sachs and and a Russian investor have invested in facebook. The deal would value the company at $50 billion.
The genuis behind facebook is that it links the power of the semantic web to people. Using simple behavioral insights facebook connects people.
Amidst the buzz this morning, skeptics are questioning the valuation for many reasons. If you are like me you may question facebook's recent pandering to the ad industry as well as the fact that analysts have simply speculated the companies $2 billion anual revenue.
I think Goldman Sachs is counting on something more than the data and ad side of the business. Last year, the launch of a few new products may point to the future of the social semantic web. Facebook entered the world of social commerce with facebook deals and facebook credits will likely turn the social software platform into a bank which acts as a clearing house between people in the exchange of digital goods.
Is this the begining of the climb to an IPO? Is Goldman's investment a safe one or is fuelling a quickly expanding tech buble?
Further fueling the digital chatter, the Goldman Sachs investment of $450 million in Facebook also includes a provision to create a $1.5 billion fund that would allow participation by it's clientele. It’s one thing to allow accredited investors to buy into such a fund, and something entirely different to open it up to high-net-worth individuals. The SEC is already investigating trades in Facebook shares on private marketplaces. So would a $1.5 billion “special purpose vehicle” created by Goldman Sachs raise a red flag with the SEC?
What do you think about Goldman Sachs’ plans to create this $1.5 billion “special purpose vehicle” for clients to invest in Facebook? Do you think that this flies in the face of the social web? Will the SEC allow this or force an IPO instead?