Facebook Gets Backing from Russia

Digital Sky Technologies, a Russian investment group, recently gave Facebook $200 million for a 1.96 percent share in the company. With the Russian backing, value for the popular social networking site stands at $10 billion, which is below the $15 billion value Microsoft placed on it two years ago but above the $3.7 billion self-estimate from the same time period.

The Washington Post reported that the investment will be used to develop new features such as video chat. There are some, like tech expert Rob Enderle, who feel the Russian backing is suspicious.

"You kind of wonder where the money's coming from," said Enderle. "After all, Eastern Europe is a major source of online-based identity theft rackets. Red flags should probably go up making sure one thing doesn't connect to the other."

According to CNET, the investment by DST would make it easier for Facebook to expand in Russia and other Eastern European countries. DST, with headquarters in Moscow and London, is close to the Russian government. That relationship could help Facebook move forward on any expansion efforts in the future.

Although the company has historically had a difficult time turning user popularity into revenue, founder Mark Zuckerberg claims the company is on track to be "cash positive" in 2010. Because the company is privately held, it is not required to release revenue information. Industry insiders and analysts estimate that Facebook is on pace to earn between $230 million and almost $400 million this year.