Facebook Stakeholder Usmanov Says Web Asset Returns Peaked
Russian billionaire Alisher Usmanov
Tate Britain via Bloomberg
Russian billionaire Alisher Usmanov.
Russian billionaire Alisher Usmanov. Source: Tate Britain via Bloomberg
Alisher Usmanov, who together with fellow Russian billionaire Yuri Milner owns about 10 percent of Facebook Inc., said he’s cautious to invest more money into Internet companies as prices may have peaked.
“Investments in Internet companies start to bring less profits compared with two or three years ago when we began to invest in them almost at a startup level,” Usmanov said in a phone interview. The $500 million March acquisition of a 5 percent stake in Chinese Web retailer 360buy.com through Usmanov and Milner’s DST Global may have been his last big direct Web investment for some time, he said.
Usmanov and Milner are among Internet investors that have been backing some of Silicon Valley’s fastest growing businesses. Their firm led a $135 million investment in daily- deals site Groupon Inc. last year and was part of a group that put $180 million into Zynga Game Network Inc., a social-gaming service, in 2009.
“There’s certainly a lot of concern that we’re getting into a real bubble around Internet companies, and I can understand that some people are getting cautious,” said Keith Arundale, a London-based venture capital consultant and former director in PricewaterhouseCoopers LLP’s global technology group. Very high valuations “seem to be extending to a lot of Internet companies” both large and small, he said.
Surging Valuations
When Usmanov and Milner bought 1.96 percent of Facebook in 2009, the deal valued the company at as much as $10 billion. Today, research firm Nyppex LLC values the world’s most-used social networking site at $65 billion.
In March, Milner and Usmanov set up a second fund, called DST Global 2, for further investments in Internet companies.
“I’ll just be a financial investor in this fund, which will have a number of investors,” Usmanov said. Goldman Sachs Group Inc. (GS) are helping to raise money for the new fund, he said. Usmanov himself may focus on working with his existing Internet investments, he said. Milner’s spokesman Leonid Solovyev declined to comment.
Usmanov, who made his $18 billion fortune through metal investments, is also the second-largest shareholder of Arsenal football club with 27 percent of the London team. Usmanov also owns 26.9% of Russia’s Web company Mail.Ru Group, which fetched about $1 billion in an initial public offering in London in October.
To contact the reporters on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net
To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net.
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