Legacy software vendors aren’t keeping up, says Box CEO Aaron Levie. “Many of today’s entrenched software solutions don’t have mobile counterparts — let alone an open platform for third-party mobile developers to leverage,” he wrote in a blog post this morning.

To support the expansion, and to handle Box’s relationships with developers, Box has hired Chris Yeh, former head of the Yahoo Developer Network, as its VP of Platform. Before Yahoo, Yeh (pictured above) was VP of marketing at Tacit Software, which was acquired by Oracle in 2008.

Things are moving fast for Box. The service is seeing 200 million calls to its API every month, which is a pretty good indicator that developers are building applications on top of Box that are getting used. And Box itself has more than six million active customers, including 60,000 companies. In February, it raised a combined $48 million in a Series D funding round from Meritech Capital Partners, with Andreessen Horowitz and Emergence Capital Partners joining prior investors Draper Fisher Jurvetson, Scale Venture Partners and US Venture Partners. The round included $10 million in debt financing from Hercules TGC. As The Wall Street Journal reported in March, Levie saw huge interest and had to turn down several investors who wanted in on the deal.

The company is also trying to give mobile app developers an additional jolt by offering a $35,000 cash prize to the winner of its Box Mobile Dev Challenge. The winners won’t just get cash — prizes also include credits to advertise on InMobi, the mobile ad network; pitch meetings with Draper Fisher Jurvetson; and TouchPads from Hewlett-Packard.

Mr. Levie, 26 years old, founded online storage provider Box.net in 2005. While his 140-person Palo Alto, Calif., company has money in the bank, Mr. Levie saw the Web investing environment heat up recently, driven by interest in fast-growing start-ups such as Facebook Inc. and Zynga Inc.

So Mr. Levie decided to tap that interest and raise new capital. In less than three weeks last month, he closed a hefty $48 million round of financing from venture-capital firms including Meritech Capital Partners and Andreessen Horowitz. In the process, Mr. Levie said he turned down several other venture firms that wanted a piece of the deal.

“There was no capital limit and we could’ve raised more,” said Mr. Levie, whose start-up counts about five million users at 60,000 companies.

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Facebook’s new data center in Prineville, Oregon, is full of Fusion-io technology, and the one planned for Rutherford County, North Carolina will be as well. Fusion-io CEO David Flynn told me in an interview some time ago that servers running Fusion-io technology constitute about 80 percent of the hardware footprint inside the Facebook building. If you ever wondered what kind of secret sauce Facebook might have in its data center infrastructure, make no mistake: Fusion-io’s flash memory-based technology is it.

The close links between Facebook and Fusion-io have a lot to do with a mutual relationship. Venture capitalist Marc Andreesen sits on Facebook’s board and is an investor in Fusion-io. Goldman Sachs and Morgan Stanley are leading the offering with JP Morgan and Credit Suisse. The filing doesn’t say how much the company expects to raise in the offering.

Along with Facebook, Fusion-io’s hardware partners Hewlett-Packard, and IBM also account for more than 10 percent of revenue.

This filing is a surprise, because as recently as December, Flynn told me the company was in no hurry to go public. It had just raised a $45 million C-round from Meritech Capital Partners, with Accel Partners, Andreessen Horowitz, New Enterprise Associates, and Triangle Peak Partners also invested. Plus it has strategic investments from Samsung, the South Korean electronics and semiconductor giant–which also happens to be the world’s biggest supplier of the flash memory chips key to Fusion-io’s technology–and Dell Ventures.

But from the looks of the numbers, it appears the company needs to raise the kind of cash that an IPO can provide. The company finished 2010 with $36 million in revenue and a $31.5 million net loss despite a gross margin of 59 percent in the latest quarter. Operating expenses were nearly $52 million, led by $24 million in sales and marketing expenses. The balance sheet shows $3.5 million in cash and cash equivalents plus another $39 million in working capital. That’s not enough to fund operating expenses assuming they remain at the same level, which they won’t, given how fast the company is ramping up.

And ramping up it is. Fusion-io just last week announced a relationship with its fourth major server manufacturer, the white-box manufacturer Supermicro, and on the same day, IBM doubled the number of servers that include Fusion-io as an option. Before that, it scored a rare public disclosure from Credit Suisse that its technology was being used to speed up trading, and there are certainly more financial companies buying the technology and simply not talking about it.

At the CeBIT trade show taking place in Germany today, the pair demonstrated a server using a new Fuion-io product, the ioDrive Octal, in a Supermicro server that can do 1.4 million random input-output operations per second.

Why team up with Supermicro? For its reach. Bob Emmett, manager of OEM sales at Fusion-io told me Supermicro has relationships with scores of resellers, private-label hardware vendors and other companies that reach places that IBM, Dell and HP don’t. “They’re the anonymous supplier in a lot of cases, because the product isn’t being sold directly under the Supermicro name,” he said.

One example: When the Lawrence Livermore National Lab announced it was using Fusion-io memory to build the world’s highest-performance storage array no one mentioned that the gear in question was actually manufactured by Supermicro, and resold by another company, Appro. It’s not a huge business, but it is a growing one: Supermicro reported $721 million in sales last year, up from $506 million the year before.

And if that weren’t enough good news for the fast-moving startup that last month sought to pick a fight with storage giant EMC over who sold the most flash memory to enterprise customers in 2010, there’s more from IBM. Big Blue has doubled the number of Fusion-io based adapters for use in its System x servers it sells with with Fusion-io tech inside it, from four to eight, and boosted the number of IBM systems that can work with Fusion-io adapters to 12. Not bad when you consider that both IDC and Gartner said last week that IBM finished 2010 as the world’s leading sever vendor by revenue.

As I’ve noted before, flash memory inside a server, is by itself not big deal. Fusion-io’s difference is in how it uses flash to put actively used data close to the microprocessor, which in conventional systems spends as much as 80 percent of its time waiting around for other parts of the computer to get data to it that it can work out. That’s a lot of wasted computing cycles, that when added all up amount to a lot of money spent. Get the data closer to the chip and you eliminate a lot of that wasted time. Always eager to squeeze more productivity out of the gear they guy, CIOs are naturally lining up to buy Fusion-io-based servers or use it in other gear, such as a trading system at Credit Suisse.

No surprised it has a lot of interest among venture capitalists. Last April the Salt Lake City-based outfit landed a $45 million in series C round led by Meritech Capital Partners, with Accel Partners, Andreessen Horowitz, New Enterprise Associates, and Triangle Peak Partners also investing.

It’s a big shot in the arm for Box, which has 5 million users and saw its revenue grow more than threefold last year, largely on business with 60,000 corporate customers including DreamWorks, Cisco Systems and Dell. Not bad for a company started in a dorm room as college business project.

I asked CEO Aaron Levie–the company started in his dorm room at the University of Southern California–what he’s going to do with all that money. “There’s a pretty significant transition underway from legacy on-premise systems to the cloud,” he says. “Two years ago it was a tool for medium sized businesses, and now we’re seeing much larger companies. Just the technology we have to build to serve those customers takes a lot of investment. We’re also going to invest in our sales team significantly.”

Use of Box.net is so easy–you can start for free sharing pretty much any kind of file–that by the time a company is talking formally to Box.net, it’s already an unofficial customer. “Our plan is to have Box.net surface [from free users] in these organizations, and then we have to sell it,” Levie said.

So why the mix of VC funding and debt? Infrastructure. Box operates two data centers in California and needs more. It can be cheaper to pay for that kind of infrastructure with debt, he said.

George Bischof, managing director at Meritech Capital, said that during the due diligence period before the investment, all the lawyers and investors involved had to use Box.net to give it a thorough going-over. “That was sort of the ultimate litmus test for simplicity if the lawyers and investors can use it well,” Bischof said.

Box.net sees itself as a rival to Microsoft’s Sharepoint, and threw down the gauntlet pretty hard in 2009 when it launched a bake-off challenge and handed out T-shirts declaring Sharepoint to be “Sharepoo.” Nothing grabs attention like starting a fight.

So does Levie want to take Box public? Sure, he says, but he’s in no hurry. “Now that we’re selling to larger companies, there’s actually a strategic reason to go public. Large public companies tend to more easily trust other public companies with their IT, so it turns out to be a competitive advantage. But it’s a few years out for us.”

One of its bragging points was around shipping flash memory to enterprise customers. During his remarks–the theme was “record setting”–EMC President and COO Pat Gelsinger grinned as he said the company had shipped 10 petabytes worth of flash memory in its storage products to customers in the past year–more than anyone else in the industry had.

If indeed that was a record, it isn’t standing for very long. Fusion-io, the Utah-based start-up that sells flash memory add-on devices for use in servers, said today that it has shipped 15 petabytes worth of flash memory to enterprise customers. It says that’s enough to play a continuous stream of HD-quality movies for 199 years straight.

Of course it has had help selling all that memory. Server vendors Hewlett-Packard, IBM and Dell are all selling Fusion-io technology as an option on their servers. There are plenty of customers buying, though few will admit to it. When we last heard from Fusion-io, it had announced that its technology is speeding up trading operations at Credit Suisse. Other customers include Myspace and Zappos.

Putting flash in a server isn’t for data storage in the traditional sense. It’s more about putting data close to the processor in a server. Most of the time–as much as 80 percent of the time–the processor chips inside servers that do the heavy number-crunching are sitting around tapping their feet, waiting to get data to work from other parts of the computer.

That equates to a lot of general waste in IT spending, CEO David Flynn told me. “If the processor is sitting idle 80 percent of the time, it may not sound so bad at first. But when you consider that you’re paying for the power and the cooling and floor space and services, it equates to a massive amount of wasted money.” How much? He thinks speeding data to the processor can eliminate $50 to $100 billion worth of waste in IT budgets. Fusion-io’s argument–and it’s one that numerous companies are buying–is that by putting data on flash chips in the server right next to the processor, you can eliminate a lot of that idle time. It’s the kind of argument that tends to resonate easily with CIOs.

As I’ve noted before, Fusion-io is coming off a busy year. Last year it hired Apple co-founder Steve Wozniak as its chief scientist. In April it landed $45 million in a Series C round led by Meritech Capital Partners, with Accel Partners, Andreessen Horowitz, New Enterprise Associates and Triangle Peak Partners also investing. It also has strategic investments from Samsung and Dell Ventures.

One who is willing is Credit Suisse, though it won’t say much. The $50 billion Swiss bank says it is adding Fusion-io’s memory – dubbed ioMemory – into its Advanced Execution Services trading platform.

So what does ioMemory do? It uses flash memory – not terribly unlike what’s used in USB drive – to basically re-write the rules of how companies with large database storage needs can work. Add an ioMemory card to a typical server with a five-figure price tag, and it can suddenly behave a lot more like a much larger and more expensive storage area network. The company is also known for its chief scientist, Apple co-founder Steve Wozniak.

Credit Suisse says in this case the ioMemory will be used to speed up algorithmic trading, which is using powerful, super-fast computers to analyze and movements in the prices of stocks, bonds and other securities, and determining when to buy and sell, based on a pre-programmed set of rules and conditions. It’s a business where, as The Wall Street Journal’s Donna Kardos Yeslavich wrote in October, milliseconds count, so banks and other financial institutions are constantly on the lookout anything that can speed the process up. (Eventually we’ll be saying femtoseconds count?)

A key bottleneck is the matter of recording trades made. This means getting the data related to the trade out of a computer’s active memory – that would be the DRAM chips similar to the what occasionally have to upgrade your PC – and permanently stored. DRAM is volatile memory, meaning that if it loses power, it loses whatever it’s storing at that moment. Flash is non-volatile, meaning it stores data permanently, even losing power, until it’s deleted. That makes it great for permanent storage that’s also a lot faster than a hard drive. The faster trades get logged, the more trades get done, the more money gets made. “It’s a matter of quickly putting the trade data in a place where it won’t get lost,” Fusion-io’s CEO David Flynn told me. “You have to make sure that your system won’t forget what’s been done, while at the same time doesn’t look track of what it’s doing.”

Credit Suisse didn’t make anyone available for an interview. Banks rarely go into even this level of public detail about the technology they use. However I did talk to Fusion-io CEO David Flynn, who tells me that Credit Suisse has been a fan of the Fusion-io technology for some time. He also says several other financial institutions are using it. “Its easier for them to use it than it is for them to talk about it,” he said.

From the looks of the investments and partners that Fusion-io has landed during the last year, he’s not kidding. In April it landed $45 million in a series C round led by Meritech Capital Partners, with Accel Partners, Andreessen Horowitz, New Enterprise Associates, and Triangle Peak Partners also invested. South Korean electronics giant Samsung, which happens to be the world’s largest manufacturer of flash memory made a strategic investment last year, as did Dell Ventures. Meanwhile Hewlett-Packard, IBM and Dell all offer Fusion-io technology as an option on its servers. Headcount has doubled in the last year from 150 to between 300 and 400, Flynn told me.

So with all this going on, is Fusion-io going to be a hot IPO or acquisition target in 2011? Don’t count on it, Flynn says. “Our VCs are willing to wait for the home-run,” he said. “And we’re not in the business of getting acquired. We have the luxury of being able to grow this company without someone with itchy fingers.”

The closely held company, based in Salt Lake City, on Monday plans to announce its third funding round–totaling $45 million–that will bring its total raised to date to $111.5 million. Meritech Capital Partners, a new investor, led the round, which has other new contributors that include Accel Partners and Andreessen Horowitz. Computer maker Dell (DELL) and electronics giant Samsung have are among the investors that have previously put money into Fusion-io.

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Well, we’re glad it’s done, our conflict of interest shoved aside by the hey-big-spenders at Microsoft and we can again resume our incredulous analysis of the insane $15 billion valuation of Facebook.

No matter who would have gotten to make nice with founder Mark Zuckerberg in the hefty ad-investment deal–Google or Microsoft–we will be sticking to our guns on this ridiculous roundelay of hype and circumstance.

That’s because this valuation, while a paper windfall for its investors and those currently employed at Facebook, has exactly no meaning until the company actually performs financially to keep up with the lofty figure and then, presumably, goes public in a great rush of glory.

Of course, that does not mean this bump–which could only happen in a very bubbly Silicon Valley–will not help the company pick up some tasty acquisitions now using its overpriced stock, as long as targets are willing to play along with the still-questionable dream of future riches.

And, of course, in the here and now, Facebook will get an even bigger slug of guaranteed ad dollars from international as well as U.S. markets from Microsoft, which will be losing a giant amount of money in the arrangement.

As a plus to Facebook and an important element in Microsoft signing this deal, by the way, sources confirm that the start-up got much better terms in its U.S. ad deal that basically lets them control the whole partnership without any hooks for Microsoft.

Does any of this really matter? From a perspective of big, cash-rich companies throwing huge dollars at hot start-ups, it is, as one investor told me last night, meaningless.

“It’s trivial to Microsoft to spend this money and worth the gamble,” this person said.

Indeed.

Because while execs at both companies talk about the potential–and there is a massive amount of it in the Facebook business model–both Microsoft and deal-loser Google, too, were willing to bankroll a loss leader in the hopes of later return, a whole lot of important education about the social-networking space and also likely solid returns in an IPO scenario.

And for Microsoft, that is OK, given that the software giant needed to land this deal for all sorts of reasons (seeming relevant in the fast-moving Web 2.0 space and, of course, the sweet-sweet feeling of actually beating out Google) and has more than enough money to burn.

That’s obvious too with the $240 million cash investment (with more to come from other greedmonger private investors, of course, in another round now being arranged by Facebook) that bought Microsoft exactly 1.6% of Facebook.

That puts Microsoft behind Greylock Partners’ and Meritech Capital Partners’ 1.7%, Founders Fund’s 5% and Accel Partners’ 11%–Accel partner and Facebook board member Jim Breyer also has a personal 1% stake, now valued at $150 million–and Zuckerberg’s 20% (not the 30% that has been widely reported), which is now worth $3 billion.

So what can we say but: Party on, Garth!

But let’s not lose sight of the fact that for all the fabulous growth, Facebook is still a very small business now carrying a very large valuation on its slight shoulders. So far, it has only $150 million in annual revenue, half of which comes from its guaranteed ad deal with Microsoft, and is break-even on a cash-flow basis.

So more cash in the kitty is a good thing, allowing Facebook, as one of its execs said yesterday, to double its work force to 700, jack up its international business and better service its 50 million active users.

This is all well and good for turbocharging a business that is growing like gangbusters. But while Facebook executives argue that all trends point upward, I still maintain that potential is not actual.

As I have previously written: “While the minions at Facebook under its young leader are laboring mightily to come up with new ways to make revenues and its strong growth is laudable and I loved the splashy widgetmania Facebook unleashed, let us try not to be too jaded when we say we have seen this story of spiky growth followed by less-than-spiky growth before.”

So excuse me for being worried about this deal and what it might do to the business discipline and attitude of Facebook, making it sit too long on the laurels of being able to gin up an investor frenzy and not focus on making the service one that is consistently innovative and useful to users and, of course, building a truly different kind of advertising business.

Frankly, while spending on social-networking sites is supposed to triple this year, I have still not seen a breathtakingly groundbreaking new kind of advertising from Facebook (or anyone else) that merits this valuation.

All the rich data Facebook collects and parses back out is amazing, but I still need to see actual ad programs and results that blow the mind and change the game.

I have talked to Facebook investor Jim Breyer many times about this concern related to this cart-before-the-horse valuation, so let me quote him directly about it, from one of our conversations:

“Companies always need to separate valuation from strategic and performance issues, and this is obviously a valuation we need to grow into and we hope we will,” he said. “But we know it is an aggressive valuation.”

That’s what you might call an understatement, Silicon Valley-style.

Oh, my.

Dig a hole and hide. The end is nigh. And how do you spell Ponzi (as in scheme) again?

When I reported in this column two weeks ago that Facebook was looking to raise a new round of funding and that software giant Microsoft was a prime contender as an investor, I suggested a big number was being bandied about to create a giant war chest for the trendy social-networking start-up.

That’s a concept that the top dogs at Facebook are seriously mulling over now, according to sources, after getting so many inquiries from investment funds and several bigger companies–such as its ad-serving partner, Microsoft–about grabbing a stake in the fast-growing social-networking Web site.

“While who and how much is still unclear and, most importantly, in what form, sources said a deal could come together quickly if the numbers are lofty enough for the site, which has about 40 million members currently. But the investment could be quite large, well beyond its last $25 million one in 2006, for little dilution.

‘There are several B’s involved in the discussions,’ said one person interested in the possible round, referring to a multibillion valuation for the Palo Alto, Calif.-based start-up.”

Today, The Wall Street Journal follows up on my story by adding more interesting details, including the fact that Microsoft is seriously considering an investment offer that would value the company at $10 billion.

(Google might be in there too, according to the story, but I think it is just there to annoy Microsoft.)

In any case, this was the ludicrous price once floated by Founders Fund’s Peter Thiel, Facebook’s first investor, which was widely derided at the time he uttered it.

More laughable still is that Facebook, according to the Journal story, might be holding out for a $15 billion valuation.

Why? Because I believe Silicon Valley can now be considered to be at Delusional Level Red. Or green, given all the cash that is being shoved in Facebook’s direction now.

Thus, it is time to take a moment to consider four things that might take some shine off the shiny Facebook:

1. Facebook is not Google: Although many in the tech sector make the comparison to the search giant, it is simply incorrect.

Is Facebook like Yahoo a bit? Certainly. A newfangled version of AOL? Absolutely! A very well done media play with all sorts of interactive bells and whistles hanging off of it? Yes, ma’am.

Indeed, it is growing its media business nicely, with $30 million in profits on $150 million in revenue.

But in comparative terms to the search giant, Facebook is a lemonade stand. Google brought in $3.9 billion in revenue in just the second quarter alone and, um, is increasing its dominance over the search sector in a mighty scary way.

Facebook, on the other hand, gets half its annual revenue right now from a sweetheart guaranteed revenue deal with, drum roll, Microsoft. No matter what either Facebook or Microsoft says, it is a money-losing deal for Microsoft so far.

How do I know this? According to many sources, Google is struggling to make ends meet in its own sweetheart guaranteed ad deal with Facebook rival MySpace, which is much larger, and Google has the best monetization engine out there.

2. Potential is not actual: While the minions at Facebook under its young leader are laboring mightily to come up with new ways to make revenues and its strong growth is laudable and I loved the splashy widgetmania Facebook unleashed, let us try not to be too jaded when we say we have seen this story of spiky growth followed by less than spiky growth before.

One need only to consider the bloom that has fallen off the MySpace rose to realize this, but the list of fast-growing and quickly wilting tech phenoms is long. PointCast! GeoCities! Netscape! AOL! Yahoo!

3. Most techies were not popular in high school: No, it is not fair, but this is true. But in a friending and poking frenzy, Silicon Valley’s denizens have embraced Facebook as only those who were picked last at dodgeball could.

I kid about the dodgeball part, but what is more serious is the warped view those in the tech sector have for Facebook, because it is the latest and shiniest thing and because their geek friends are all using it.

Are they anticipating a fatigue factor with regard to the service? I am. Are they wondering how hard it will become for Facebook to constantly innovate, despite its embrace of third-party apps, to keep fresh? I am. Do they know that there is a limit to the subscriber growth over time? I do.

As I have said many times–I like Facebook. I think it is well built and run. It’s cool. I think it is, in its next-step way, even visionary.

But do I think it will sustain this over time? Count me dubious.

4. A sucker is born every minute: Let’s go to the calculator.

Thiel initially invested $500,000 in 2004 in the company, which was followed by two more rounds, for a total of about $32 million. The last one was more than a year ago for $25 million, giving Facebook a $525 million pre-money valuation.

Other major investors include Accel Partners (Accel’s Jim Breyer is also on the board, along with Zuckerberg) and Greylock Partners, as well as Meritech Capital Partners.

Tally: Microsoft has to be seriously desperate to be considering this much of an investment for so little, even with its bags of cash to spend. While I like big, bold and even addled moves as much as the next person, this one is a doozy.

That said, there is always another fool in line to pass on the buck. A sky-rocketing IPO could wipe clean this round of insanity.

But that does not take away the fact that Facebook is not worth this ridiculous price now. It might be in time, or it might not.

So, as I once advised Zuckerberg in another post: If you can get it, take the dumb money and run as fast as your flip-flops will carry you.

Please see this disclosure related to me and Google.

Here’s an interesting idea if you don’t want to get bought and you can’t quite IPO yet and you need to have a tidy war chest for expansion or perhaps a choice acquisition or two: Bring in more investors and raise more money at a huge valuation.

That’s a concept that the top dogs at Facebook are seriously mulling over now, according to sources, after getting so many inquiries from investment funds and several bigger companies–such as its ad-serving partner, Microsoft–about grabbing a stake in the fast-growing social-networking Web site.

While who and how much is still unclear and, most importantly, in what form, sources said a deal could come together quickly if the numbers are lofty enough for the site, which has about 40 million members currently. But the investment could be quite large, well beyond its last $25 million one in 2006, for little dilution.

“There are several B’s involved in the discussions,” said one person interested in the possible round, referring to a multibillion valuation for the Palo Alto, Calif.-based start-up.

Those kinds of valuations have already been bandied about for the site, from a just-under-$1-billion deal from Yahoo that fell apart last year and rumors of a $6 billion interest from Microsoft.

And in a widely read interview with the Deal in July, board member and early investor Peter Thiel (pictured here) of the Founders Fund floated a more massive figure.

“If we got an offer from someone for $10 billion, we probably would listen to them,” Thiel told the Deal’s David Shabelman. “I don’t think we’re going to get that offer, and we’re not going to solicit it.”

Thiel initially invested $500,000 in 2004 in the company, which was followed by two more rounds, for a total of about $32 million. The last one was more than a year ago for $25 million, giving Facebook a $525 million pre-money valuation.

Other major investors include Accel Partners (Accel’s Jim Breyer is also on the board, along with Facebook founder Mark Zuckerberg) and Greylock Partners, as well as Meritech Capital Partners.

In the Deal interview, Thiel also said that Facebook would not go public until its business was stronger and not until at least 2009, following the successful tactics once employed by a pre-IPO Google.

But that’s a lot of time for the company, which needs to keep growing at a rapid pace, both from a technology and innovation point of view.

While it is on track, Thiel and Breyer have both said publicly, to have revenues of $150 million this year, half of that comes from its guaranteed ad deal with Microsoft.

While its revenues are growing strongly, insiders report, so are its costs, as it ratchets up headcount and features and services.

Thus, it will need a lot of investment to keep competitive, including increasing its international profile.

For example, top Facebook execs are now in London, meeting with the British press and also announcing the opening of a spanking new office there. London is Facebook’s largest member city, in terms of geography, and Britain is its third biggest country, after the U.S. and Canada.

In addition, Facebook might need a pile of moolah to buy smaller companies to help build its business, such as its very first acquisition in July of Parakey (mostly for its star techie duo, Blake Ross and Joe Hewitt, co-founders of Mozilla Firefox).

But in order to do more acquisitions, Facebook might want a larger established valuation for its stock and also cash to use.

“If Facebook can do this without significant dilution, it’s a great deal for the venture investors,” said one person familiar with Facebook. “And it could give Facebook a lot of flexibility.”

But who gets to invest is another story, especially given that the company is the latest hot ticket since Google in Silicon Valley. An obvious candidate is Microsoft.

But some close to Facebook worry that aligning itself so closely with the software giant is a mistake, believing that it should not be too closely linked to any one company.

In any case, given the heat surrounding the company, there is no lack of moneybag suitors, all waiting to rain down copious cash on Zuckerberg and his team.