DST Ready to Invest $1 Billion in Internet Companies

Anyone watching the social media online market has been hearing a name a lot lately, Digital Sky Technologies (DST). The Russian internet investment group has been making some rather big splashes after a couple of huge investments, in Facebook and Zynga, some of the company's first forays outside of its home territory. But they're definitely not the last; in fact, Yuri Milner, the Russian investor behind DST, is looking to invest in several more companies in the coming years and has $1 billion put away for that.

In an interview with BusinessWeek, Milner talked about his future plans and made it clear that his ambitions don't stop at just getting a foot through the door; he wants DST to be a major player in web services and products internationally. For that, he is looking to invest in plenty more startups and is keeping a very close eye on the market.

"We monitor close to 50 companies globally that can be potential investment opportunities," Milner said. "I'd like to see DST as a significant global investment company in the Internet arena." His next step is to announce another investment by mid-2010 and possibly more. One possibility is AOL's second IM service, ICQ, in which DST is said to be interested. DST already has a big share of Russia's web market, where ICQ is particularly popular, owning VKontakte, the largest social network in the country, Mail.ru, the largest web portal and many other proprieties.

Most people first heard about DST when the company bought a 2 percent stake in Facebook for $200 million last summer at a whooping $10 billion valuation for the social network. Granted, Microsoft's previous investment valued Facebook at $15 billion. DST didn't stop there though and has since acquired Facebook stock from various investors or employees raising its stake to a rumored but unconfirmed 5 percent.

DST's second move was equally bold and safe at the same tine as the initial Facebook investment. The group put down $180 million for a stake in Zynga, the up and coming social gaming company, which is the current leader in the emerging market. Social gaming is growing at an unbelievable pace but, unlike Facebook, for example, this growth translates into actual revenue. Zynga's top game, Farmville, is now played by 80 million people on Facebook alone.