The investment gives Digital Sky Technologies a nearly two per cent stake in the Palo Alto, California-based company's preferred stock.

The deal presumes the company is worth US$10 billion.

This is below the US$15 billion valuation implied by a 2007 investment from Microsoft Corp, even though Facebook has substantially grown since then. However, Facebook's own appraisal after the Microsoft deal gave the company a market value of about US$3.7 billion, according to details revealed in a legal settlement.

- AP