Naked Soul

Digital Sky Technologies is the new owner of just less than 2% of Facebook, paying a whopping $200 million for the privilege. But it’s still a bargain compared to what Microsoft and others paid - this current round values Facebook at a third less than the $15 billion valuation they accepted in October 2007.

 One thing that isn’t clear is why Facebook took the money. Late last year Zuckerberg said he’d be willing to raise more, but only at the $15 billion valuation. Now they’ve raised money at $10 billion, even though they still say they’re approaching profitability and don’t really need it. We discuss that in the interview, but the answer still eludes us.

Milner is a colorful character. He was the first Russian to get an American MBA - he graduation from Wharton Business School in 1992. Instead of taking a U.S. investment banking job he returned to Russia “to take advantage of the developing free markets,” he said, adding “My idea is to be in the most useful place in the proper time.”

Milner’s DST has made investments in Mail.ru, the “Yahoo of Russia,” and Vkontakte.ru, the largest Russian social network with 34 million users. Vktontakte, by the way, looks a lot like Facebook.

It hasn’t been all roses and champagne for Milner. He was an executive at Bank Menatep, the company that had an indirect controlling interest in Yukos Oil Company and was involved in the $4.8 billion diversion of International Monetary Fund funds. That entity was accused of having ties to organized crime, and some of Milner’s colleagues are still in prison (there have never been any accusations against Milner at all). His time at Bank Menatap is not mentioned on his DST bio.

One thing Milner doesn’t seem bothered by is the lack of a board seat at Facebook, a sticking point for the company.