January 4th, 2011
03:50 AM GMT
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Can Facebook – a company that turns an estimated $2 billion in annual revenue – have a market value 25 times as high?

Goldman Sachs and a wealthy Russian investor apparently think so. The pair invested $500 million in the social media giant, with a view that the actual worth of the company is $50 billion.

“For Goldman, this is a great strategic play because not only do they have the possibility to be at the front of the line when Facebook eventually IPOs – which many believe to be in 2012 – but they also have this great branding of having these assets and attracting new investors,” Evelyn Rusli, one of the New York Times reporters who broke the story, told CNN.

The report adds to the fear that a Dotcom Bubble 2.0 is forming, an idea that gained ground when Google recently offered to buy online coupon company Groupon for $6 billion – and was turned down.

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January 4th, 2011
02:31 AM GMT
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(CNN) – First Indonesia, now South Africa making the argument that it’s an emerging economy worthy of the BRIC acronym.

South Africa’s leader has reportedly been invited to the next BRIC summit, coming up in April, in Beijing.  China is apparently in favor, and Russia too, with both countries touting how politically significant such a decision would be.

The South Africa boosters say it’s strategically important, and with Russia’s economy struggling in the first part of 2010, very relevant.

But geopolitics aside, what about the economics?  Some analysts say, look at the numbers, and forget about messing with the popular acronym.

South Africa and Russia have equity markets of comparable size at $718 billion. But South Africa’s economy is only about a quarter the size of Russia’s. Its population size, as you’ll see in my video blog posted here, is a mere fraction of the larger members.

According to David Spegel who analyzes emerging markets for ING, Russia is important because it is the only major energy exporter among the BRICS, with 68% of exports being fuels and metals.   South Africa does not fill that need among the bloc.

And watch out in 2011. Russia may have a banner year if, as some analysts predict, that sleeping giant has just woken up.



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