Today Facebook announced that it had closed an additional $60M investment from Li Ka-shing. This is interesting for a few reasons.
For one, it adds one more investor joining MSFT’s $240M investment at the $15B valuation. It’s important to remember than MSFT did not invest $240M, but committed to investing $240M at $15B at the next round (the money might have changed hands, but the paperwork has not).
More importantly, this adds a lot of leverage and gamesmanship to Facebook’s Chinese strategy. Bear in mind that MySpace China has the luxury of being represented by none other than Wendi Murdoch, Rupert Murdoch’s wife. The local representation is a greater advantage than money can buy.
Of course, there’s more to it than that: Facebook was willing to pay $85M for a Chinese site with 10M uniques in China, that deal has not closed, and might not even materialize… In China, 10M uniques is nice but not a winner so I think Facebook might prefer to develop their own site there than acquire or partner… but that means finding a Mark Zuckerberg in China to shepherd the project, which is not obvious because Zuck is a control freak kind of guy… I’m not knocking the guy, but let’s face it: his senior management team is a musical chair and revolving door… part of that reason, methinks, is so Zuck can maintain operational control over all areas of the firm.
Ultimately, Facebook might still buy its way into the market, but with an additional $60M and Ka-shing on board, they’ll have more leverage in talks: we’ll buy you or we’ll compete with you. Usually it’s easier to buy than to build, but the threat alone would scare lesser men.
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