The piece seems to have been primarily reported this winter, just as Chatroulette was becoming a phenomenon and shortly before Ternovsky lit out for the United States. If you’re interested in digital media investing, there are a few tasty tidbits, like Union Square Ventures partner Fred Wilson’s assistance in arranging a visa for Ternovskiy, and the programmer’s disdain for Digital Sky Technologies’ Yuri Milner.

And there’s a tiny bit about Chatroulette’s finances, at least as of a couple months ago: Since Google (GOOG) wouldn’t get cut him an AdWords check, Ternovsky’s sole source of revenue was Mamba, a Russian dating service. But that was enough: He was generating $1,500 in advertising a day, which he said covered his costs. Still, there’s not much in the way of “news” here.

But make a point of reading Julia Ioffe’s story, which paints a compelling portrait of Ternovsky’s Moscow childhood. It’s going to seem both familiar and alien to a lot of you.

He was born on April 22, 1992, less than four months after the collapse of the Soviet Union, and grew up in a tidy apartment in a typically dingy Moscow high-rise. His mother, Elena, is a talented mathematician who works on differential equations at the élite Moscow State University. His father, Vladimir, is an associate professor of mathematics at the same university, and dabbles in cybernetics. Their household was loving but turbulent. The couple fought and frequently separated, and Vladimir started a parallel family, an issue that was never openly discussed. (“It’s a little game we play,” Elena said of the arrangement.) Andrey retreated to his room, where, thanks to Vladimir’s belief that “the future would have something to do with computers,” there was always a machine, as up to date as the family could afford. Vladimir invested great effort in Andrey’s upbringing, engaging a Chinese tutor, a weight-lifting coach, and a chess teacher. But most of Andrey’s learning occurred alone, with his computer. He started with games, usually of the reality-simulating variety. By fourth grade, he was writing code.

Like many young Russians with programming skills, Ternovskiy turned to hacking. When he was eleven, he came upon zloy.org (which translates as angry.org), a hacker forum led by a young man named Sergey (a.k.a. Terminator), who trained his followers in cyber warfare. Using the handle Flashboy, Ternovskiy soon mastered the art of the denial-of-service attack, wherein a target system is paralyzed by a mass of incoming communication requests. Next came Web-site and e-mail hacking, a service he gladly performed for girls who asked nicely. By 2007, at the age of fifteen, Ternovskiy had learned about what hackers call “social engineering”–getting what one wants through deceit or manipulation. Posing as a teacher, Ternovskiy got access to some practice tests before they were delivered to his school.

You can, and should, read the rest here.

“Rustechdel”–for Russian Tech Delegation–was hash-tagged by people like Twitter Co-founder Jack Dorsey, start-up investor Esther Dyson and actor Ashton Kutcher, who joined the U.S. State Department technology delegation in Moscow for a week of extolling the benefits of social media to Russians.

Read the rest of this post on the original site

[UPDATED: With news that employees can sell up to 20 percent of their shares.]

According to sources close to the situation, current and former employees of Facebook are now going to be able to sell up to 20 percent of their common shares.

It is part of a $100 million add-on investment in the social networking company by the Russian investors who recently put $200 million into the company for preferred shares.

That investment a month ago by Digital Sky Technologies was valued at $10 billion, since those shares have various special rights, depending on what was negotiated.

The new tender offer by DST values the company at $6.5 billion for the common shares, or $14.77 a share. The last common share valuation of the company was around $4 billion.

The move has been expected for Facebook employees since DST made its first investment.

It will allow them to monetize shares, since the company is not likely to go public for at least a year or more.

Employees have 20 days to decide to take the offer or not and can only sell up to 20 percent of their stock–in other words, they cannot cash out completely.

“I can afford a down payment on a house now,” said one longtime employee, who is typical of many. “But not a really big house.”

But the top leadership of Facebook, such as CEO Mark Zuckerberg or COO Sheryl Sandberg, are not eligible to sell shares.

Facebook confirmed the DST investment, with a statement from Zuckerberg:

“While individuals must make their own decisions about participating in this program, I’m pleased that the price DST is offering is much greater than the price originally considered last fall. This is recognition of Facebook’s growth and progress towards making the world more open and connected.”

If fully accepted by those employees eligible, it will give DST 1.54 percent more of Facebook, for a total of 3.5 percent of the company.

That makes DST–based in London and Moscow–one of the bigger Facebook investors, with a stake larger than one owned by Microsoft (MSFT).

The software giant invested $250 million in Facebook for preferred shares in 2007, but the valuation was then $15 billion. That huge figure was due to a competing bid from archrival Google (GOOG) at the time.

In any case, neither DST nor Microsoft got a board seat or “special observer rights” in return for its money.

Here’s a video interview I did with one of DST’s top execs, Alexander Tamas, along with Sandberg, right after it made its first investment in May, while both were attending the seventh D: All Things Digital conference:

]]> http://allthingsd.com/20090713/facebookers-start-cashing-out-with-new-100-million-investment/feed/ 0 http://allthingsd.com/20090526/the-first-video-interview-with-facebooks-new-russian-investor-plus-coo-sheryl-sandberg/ http://allthingsd.com/20090526/the-first-video-interview-with-facebooks-new-russian-investor-plus-coo-sheryl-sandberg/#comments Tue, 26 May 2009 19:33:47 +0000 Kara Swisher http://kara.allthingsd.com/?p=13902

Because a lot of tech’s big shots are converging on our seventh D: All Things Digital conference, BoomTown managed to grab Facebook COO Sheryl Sandberg and Alexander Tamas, one of the key execs of the social-networking site’s newest megainvestor, Digital Sky Technologies.

Here’s my video interview with them about the $200 million that the Moscow- and London-based DST announced today that it had invested in Facebook, at a $10 billion valuation.

The pair are queried about the investment, the valuation, the advertising prospects for the Silicon Valley-based Facebook, competitors and when the IPO might come.

Sandberg also offers to buy the All Things Digital empire with Facebook’s piles of new cash. We said: Nyet! (with a shoe pounding on table for emphasis).

Here’s the video:

]]> http://allthingsd.com/20090526/the-first-video-interview-with-facebooks-new-russian-investor-plus-coo-sheryl-sandberg/feed/ 0 http://allthingsd.com/20090526/da-facebook-takes-200-million-from-russian-investors-at-10-billion-valuation/ http://allthingsd.com/20090526/da-facebook-takes-200-million-from-russian-investors-at-10-billion-valuation/#comments Tue, 26 May 2009 16:17:32 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=7743 Facebook is indeed taking money from Russian investor Digital Sky Technologies. As previously reported, the social network is selling $200 million of preferred stock at a $10 billion valuation; DST will also buy up to $100 million of common stock at a lower valuation later this year.

DST will not get a board seat or “special observer rights” in return for its money. The two companies are holding a press conference shortly, so we may be able to extract a few more details.

The $10 billion valuation is comedown from the $15 billion figure that accompanied Microsoft’s (MSFT) 2007 investment, but no one expected that figure to hold up–in large part that deal was driven by a bidding war with Google (GOOG) and not much else.

Facebook and its newest investors are conducting a conference call to discuss the deal; I’ll be covering the call live.

FACEBOOK RECEIVES INVESTMENT FROM DIGITAL SKY TECHNOLOGIES

Passive Investment Includes Stake in Preferred Stock, Common Stock and Support for Facebook’s Continued Global Growth

PALO ALTO, Calif. — May 26, 2009 — Facebook today announced that Digital Sky Technologies (DST), one of the leading internet investment groups globally with significant stakes in Eastern European and Russian internet businesses, has made a $200 million investment in Facebook in exchange for preferred stock, representing a 1.96 percent equity stake at a $10 billion valuation.

In addition, DST has indicated that it is planning to offer to purchase at least $100 million of Facebook common stock from existing common stockholders that would facilitate liquidity for current and former employees’ vested shares in the company. The details of the plan are expected to be announced to eligible participants during the summer. Consistent with Facebook’s practice with other recent investors, DST will not be represented on the Facebook board or hold special observer rights.

“This investment demonstrates Facebook’s ongoing success at creating a global network for people to share and connect,” said Facebook CEO Mark Zuckerberg. “We’ve worked hard to bring more than 200 million people — 70 percent outside of the U.S. — onto Facebook to share with friends, family and co-workers. A number of firms approached us, but DST stood out because of the global perspective they bring — backed up by the impressive growth and financial achievements of their internet investments. We’re looking forward to working with the DST team.”

“Our investment experience in other regions reveals the tremendous value social networking companies create as they redefine how people communicate and interact,” said Yuri Milner, chief executive of DST.  “By every important metric — user growth and engagement, technological innovation and financial performance — Facebook is on a similar trajectory, though on a much more global scale. We’re delighted to invest in Facebook, Mark and his management team as they make the world more open and connected.”

Based in London and Moscow, DST is a well-respected investor in a number of successful internet companies, holding significant interests in Russia and Eastern Europe, such as Mail.ru, Forticom and vKontakte.  DST’s main assets account for over 70 percent of all page views in the Russian-speaking internet and its social networks are the market leaders in more than 13 countries, addressing a combined population of more than 350 million.

DST is run by its three partners who have complementary backgrounds in operations, investments and finance: Yuri Milner, previously CEO of Mail.ru, the #1 Russian language website; Gregory Finger, previously head of the Moscow office of NCH, a multi-billion dollar hedge fund; and Alexander Tamas, previously co-head of internet and software coverage in EMEA for the Investment Banking Division of Goldman Sachs. With its advanced understanding of opportunities in technology and social media, DST is a good fit for Facebook and an insightful partner that can help unlock additional growth opportunities.

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