50 billion reasons why Facebook is not worth $50 billion

Facebook's latest valuation verges on the absurd -- its stable of investment partners don't inspire confidence either

It seems Facebook, the social network personally endorsed by God, is now worth more than eBay, Yahoo, and Time Warner -- all without selling a single share to Joe or Jane Public. The reason: Wall Street uber-bank Goldman Sachs, which just pumped another $450 million in venture capital into Facebook, leading to a valuation estimated at a cool $50 billion.

You remember Goldman Sachs, right? The ones who received billions in U.S. taxpayer bailout money and promptly issued billions of dollars in bonuses to employees? The ones who admitting to bamboozling investors with worthless subprime mortgage funds in 2007 and ended up paying record fines of $550 million -- a fraction of the profits accrued? The ones in $2,000 Armani suits who make the Mafia look like Mouseketeers?

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Those guys. They're the ones Facebook jumped in bed with -- so if Goldman Sachs says Facebook's worth $50 billion, how can we mere mortals dispute that?

Also sleeping with Facebook: Digital Sky Technologies, a Russian investment firm that is largely responsible for foisting Zynga (aka Farmville et al.) upon the world. The company dropped another $50 million into Facebook's pockets, bringing its total investment in the social network to around half a billion dollars.

DST is allegedly controlled by a Russian oligarch and Putin pal named Alisher Usmanov, who is described thusly by Gawker:

Usmanov... who reportedly owns 32 percent of DST, comes with the sort of unsavory press clippings worthy of a long-surviving oligarch in anarchic, organized-crime-ridden Russia: He's been accused by a former British ambassador of being a "gangster and racketeer" and of close ties to mafia drug trafficking and, as we've reported previously, controversially tried to censor bloggers who linked to news of the accusations.

How do you feel about sharing all your personal information with Facebook now?

According to the New York Times Dealbook blog, the investment gives Goldman Sachs the inside track on bringing Facebook public, if and when it decides to do an IPO. In the meantime, Goldman is creating a "special purpose" investment vehicle for millionaires who want to get in on the bottom floor before the elevator is officially open to the public.

Hmm, that sounds eerily familiar. Wasn't that subprime mortgage vehicle -- the one Goldman Sachs sold as a Ferrari but turned out to be a jalopy -- also a "special purpose" investment?

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