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Privacy is a wonderful thing. With a straight face one can say that a company is worth several billion dollars having not produced a single fact to back it up. Similarly the debate about Facebook’s valuation is somewhat futile. There are simply not enough numbers to construct a meaningful picture of the social network’s finances.

For instance, on Tuesday, Russian investment company Digital Sky Technologies announced that it has paid $200m for a 2 per cent stake in Facebook via preference shares. With a similar (but undisclosed) structure to Microsoft’s $240m investment in late 2007, the putative valuation has shrunk from $15bn to $10bn. DST also expects to purchase another $100m of common stock owned by Facebook’s employees in the summer.

Facebook itself, meanwhile, refuses to divulge its financial performance. Revenues apparently grew by 70 per cent last year, and chief executive Mark Zuckerberg expects to produce positive cashflow in 2010. Positive earnings before interest, tax, depreciation and amortisation are claimed for the last five quarters. Independent guesses for sales run at about $500m in 2009.

However, the real question is why Facebook, apparently doing so well, needs the extra funds? DST owns stakes in a variety of Russian and eastern European online companies, including social networks. It might perhaps have some insight from experiments to extract cash from users, but the fact remains that Facebook is still working out how to turn its popularity into real money. Advertisers treat social networks as a low quality prospect, thanks to the vast amount of inventory available, and users’ general lack of interest in clicking on adverts while they are commenting on pictures of their friends. Still, any billboard that reaches 300m sets of eyeballs every month is valuable. At least we now know how much DST thinks Facebook is worth.

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