By Richard Koman / Top Tech News. Updated December 03, 2007.
Just when some people were beginning to doubt whether Facebook was really worth $15 billion, the richest man in Asia has made an investment in the social-networking site that appears to back up that valuation. The move has fueled speculation that more Asian investment in the company is coming soon.
Li Ka-shing, the head of a Hong Kong conglomerate with some 250,000 employees, invested $60 million in Facebook for a .04 percent share of the company, the Wall Street Journal's All Things Digital blog reported Friday. That puts Facebook's valuation on track for $15 billion. Li also has an option to invest another $60 million in Facebook.
Microsoft invested $240 million in Facebook recently for 1.6 percent of the company, generating the $15 billion valuation. Neither Li nor Microsoft received a seat on Facebook's board.
According to Forbes, Li's companies, Cheung Kong and Hutchison Whampoa, cover a diverse range of industries, including real estate, cell phones, retail, electricity, and container terminals, making Li the richest man in Asia and the 10th richest person in the world.
Tom Group Soars on Rumors
The Journal's Kara Swisher reported that Li made the Facebook investment through his private foundation, not through any of his companies. Li is the major investor in Hong Kong's Tom Group, and that fact -- plus one line in Swisher's report -- appears to have sent shares in Tom Group soaring Monday. TOM ended the day up 23 percent, even though it denied making any investments in Facebook.
Li's investment in Facebook "might give Tom a leg up in possible partnerships with Facebook in China," sources told Swisher. If the deal does materialize, it could be a boon for Tom's online media portal, one of the top Internet sites in mainland China.
Tom's businesses also include outdoor advertising, television, and book and magazine publishing. "Even if there is a partnership between TOM and Facebook, we need to know the details of the collaboration before we can estimate the financial impact on TOM," said Citigroup analyst Catherine Leung.
Beacon Troubles Mount
The investment comes after Facebook suffered a loss on its aggressive Beacon advertising program in which products that Facebook users purchased from other sites would appear on friends' Facebook profiles. Users could opt out of transmitting individual transactions to friends but not out of the entire program. The liberal activist group MoveOn led a campaign to give users more control and on Friday Facebook announced it would provide a full opt-out option.
That controversy continues, however. On Friday, Computer Associates reported that "Facebook is collecting information about user actions on affiliate sites regardless of whether or not the user chose to opt out, and regardless of whether or not the user is logged into Facebook at that time."
On Monday, Facebook denied CA's report, but much damage had been done. Friday, Coca-Cola, which had made a very large commitment to Beacon, pulled out, saying it was taking a "wait and see" approach to user acceptance of the program.
Lawsuit Docs Stay Online
And in yet another setback for Facebook, a federal judge rebuffed the company's request for a court order to force a magazine to remove court documents from its Web site. The documents were part of a lawsuit against Facebook founder Mark Zuckerberg claiming that he stole the idea and some of the code for Facebook from fellow students at Harvard.
The documents were sealed by the court, but a reporter for 02138 magazine obtained them when a court clerk, apparently by mistake, let him copy some of the sealed documents. Judge Douglas Woodlock rejected Facebook's request that he order the documents removed from the site.