Facebook considering leaseback of Sun Micro’s Melano Park Campus

Facebook has been rumoured to be scouting for a new campus to expand and it seems to have zeroed in on the Sun Microsystems campus in Melano Park. In a smart move, the company seems to be considering leaseback of the property, saving millions of dollars (not that it needs it with the new funding). 

The move has come as Facebook seems to have outgrown its current office at 1601 South California Ave in Palo Alto. What with over 2,000 employees and a hiring spree planned, this is the best time to make a shift.

Facebook is playing safe for now and refuses to confirm anything on this issue:

“We are exploring options for a long-term location to fit our growing business needs. We are in the due diligence phase on one potential site, but it would be premature to offer any specifics. We hope to have more to share in the near future once things have been finalized.”

The leaseback is supposed to enable Facebook to sell the property to a REIT or other institutional investors. The investment group will later lease the campus to Facebook as a longterm tenant. This will help Facebook to easily migrate to a bigger campus while at the same time saving a lot of cash (hundreds of millions).  As the current rumours go the assessment value of the leaseback will be around $420 million. Obviously the new funding Facebook has received from Goldman Sachs will help to finance the deal.

Source : Techcrunch

Facebook Valued at $50 billion by latest investor Goldman Sachs

Facebook has received massive amount of funding aggregating to $500 million placing its current valuation to $50billion. This recent influx of funds has come primarily in the form of $450 million from Goldman Sachs and $50 million from a Russian venture capital firm Digital Sky Technologies, according to a report by New York Times.

With this new rounding of funding, Facebook has raised over $1.3 billion till now. According to the NYT report, it’s the first time Goldman Sachs has invested in Facebook, while Digital Sky Technologies has previously invested close to $500 million. Goldman Sachs is now being offered an option to sell $75 million part of its kitty to the Russian firm.

Goldman Sachs has promised to help Facebook raise another $ 1.5 billion with a “special purpose vehicle” that will enable individuals to invest in Facebook indirectly. This particular aspect of the deal concurs with 

 Mark Zuckerberg’s reluctance to offer an initial public offering.

What will Facebook do with all that money?

According to experts, the first thing that the company has in mind is to cash out some of its existing employees and investors. Facebook did this previously when DST had bought $200 million Facebook stock from its employees.

Another rumour that is doing the rounds on the internet is that Facebook is in talks with Sun Microsystems to purchase its campus in Melano Park, California from the Oracle Corp. With an additional campus Facebook may get the much needed room to expand and plan for its growth in the future.

The most important thing Facebook is going to do is considering hiring new talent. For a company with a $50 billion valuation, Facebook has incredibly less number of employees, about 2,000. So to truly expand its capabilities the firm needs to hire fresh talent.

If Facebook truly wants to challenge Google, then it needs to foray into new markets and assimilate its standing in the social media as the prime mover of information. A few acquisitions may also be on the table in 2011. For now all we can do is wait and watch.

What do you think about Facebook's new funding? What should it do? Let us know about it in the comments.