Social network Facebook has raised $500 million at a valuation of $50 billion, from Goldman Sachs and Digital Sky Technologies, reports the New York Times, quoting unnamed sources. According to the story, Goldman Sachs is putting in $450 million, while the Russian investor Digital Sky Technologies, which had previously invested $200 million in Facebook in May 2009, is making a follow on investment of $50 million. At that time, the 1.96% stake picked up by Digital Sky had valued Facebook at $10 billion; this round of investment indicates a five fold increase in the valuation of the social network. With this, the total round of funding that Facebook has raised goes up to $1.35 billion: Facebook had previously raised $850 million, according to Crunchbase. Facebook is believed to be earning close to $2 billion a year, more than doubling year on year, and reportedly, it is profitable. So what will Facebook use all this money for? The NYT story suggests that earlier shareholders, including Facebook employees, may be allowed to cash out some of their stakes from this transaction, so this may be about giving some investors an exit. Additionally, the investment from a Wall Street firm like Goldman Sachs hints at a potential IPO from Facebook, which NYT sources say could be in 2012. The investment from Goldman Sachs also reiterates the growing dominance of social networks in the digital world, offering significant competition to Google. It's important to note that Facebook has developed as a social platform rather…
