All Things Digital

Silicon Valley luminary Marc Andreessen (pictured here) has been asked to join the board of Facebook, according to several sources with knowledge of the situation.

While the arrangement is not completed yet, sources said the longtime entrepreneur has verbally agreed to accept the post to become the fourth member of the board of the Palo Alto, Calif.-based social-networking site.

Other board members include Accel Partners Jim Breyer, Founders Fund’s Peter Thiel and Facebook CEO and Founder Mark Zuckerberg. Greylock Partners David Sze also has observer status on the board.

Since he co-founded browser pioneer Netscape in the 1990s and helped usher in the Internet age, Andreessen has been an active investor and has created several successful start-ups.

His most current effort has been Ning, also based in Palo Alto, which is a white-label social-networking company that recently raised another $60 million in funding.

If Andreessen joins Facebook’s board, the move is yet another sign that the much-hyped start-up, which has undergone some growing pains over the last year, as well as garnering a $15 billion valuation, is growing up by bringing some major high-profile tech figures into its ranks.

Last night, for example, BoomTown broke the news that Google PR head Elliot Schrage had accepted a similiar job at Facebook.

That comes after Facebook hired another top Google (GOOG) exec, Sheryl Sandberg, as its COO, in March.

A while back, BoomTown suggested that Web 1.0 golden boy Andreessen–pictured here on the iconic Time magazine cover in 1996–would be a good mentor for current golden boy Zuckerberg, in a piece I did about potential execs for Facebook.

As I wrote in February:

But why not go for the man who was Zuckerberg before Zuckerberg was cool. Yes, the shiniest of Golden Geeks himself, Marc Andreessen.

I could go on and on about the similarities I find between the two, if you compared today’s Zuckerberg with the Netscape founder in the mid-1990s.

From their arrogant innocence to their visionary qualities to their enfant-terrible charm, it is almost as if they were separated at birth.

But now Andreessen is all grown up and much, much matured from when I covered him. He has become all calm and sage and he even does a very decent blog.

Plus, he has also started and run a number of start-ups after Netscape, giving him deeper managerial experience over the last dozen years.

And, best of all, Andreessen knows the pressure of being the best-thing-since-sliced-bread in the tech sector, and its inevitable downside too.

Overall, a real mentor and partner for Zuckerberg, making a perfect pair of Golden Geeks.”

Former Yahoo Senior Vice President Tim Cadogan will take the CEO job at OpenX, the popular open-source ad server start-up, backed by Index Ventures, Accel Partners and others.

As part of the change, the company will move from its London HQ to Los Angeles. OpenX has about 30 employees, including 10 developers in Poland, but not all will be moving West.

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After BoomTown broke the news yesterday that top Google exec Sheryl Sandberg was tapped by Facebook Founder Mark Zuckerberg to be COO of the hot social-networking company, I talked with her and got the usual blah-blah quotes about scaling and growing operations and building a platform and how she wasn’t leaving Google as much as “going to an opportunity.”

But, as loyal readers will find out in the weeks and months ahead, she is sure to make for a much more lively new character in our ongoing and near-obsessive coverage of the Facebook saga, which we at BoomTown HQ like to call “As the SuperPoke Turns.”

It is certainly an interesting bet for Sandberg to make the move from the powerful Google (GOOG) to the upstart Facebook. And whether she wins or loses, it will be fascinating to watch.

But fried as she was late last night when we talked after the big announcement was finally made and deserving of a break, BoomTown will bring you a sassier sit-down with Sandberg after she clears out of the Googleplex Friday after six years (wherein all her rights to unlimited visits to the organic soba latte barista and shiatsu massage therapist will be suspended tout de suite!).

So until then, here are some sizzling tidbits about Sandberg (pictured here, with those soon-to-vanish colored Google exercise balls) to chew on:

The 2007 holiday party where Sandberg met Zuckerberg for the first time was thrown by former Yahoo president and COO Dan Rosensweig, who is close to both (apparently, BoomTown’s invite, where I could have witnessed this historic meeting, was lost in the mail!). Interestingly, Rosensweig himself was someone Zuckerberg probably considered bringing into Facebook.

One plus for the socially awkward Zuckerberg is that Sandberg–who spent her formative years swimming in the shark-infested waters of Washington, D.C., as chief of staff to Treasury Secretary Larry Summers during the Clinton administration–has struck a lot of friendships around the Valley. That includes Google rival Yahoo (YHOO), where her husband David Goldberg once headed up the music efforts. Yahoo President Sue Decker is a good friend, for example.

Sandberg even seems to make nice with VCs (she has to, as her husband is now an entrepreneur-in-residence at Benchmark Partners). According to Facebook board member and major investor Jim Breyer of Accel, for example: “I met her in 2001 at the U2 Concert in San Jose. Bono called her name out in front of the whole crowd thanking her for the work she had done with Larry Summers. We (including Bono) all went out for drinks afterwards. Little did I know that it would be a 23-year-old entrepreneur who would finally allow me to recruit her.”

Ah, the sweet ironies of the Valley!

Speaking of which, here’s a video I did in June, with a longish chat with the then-pregnant Sandberg at the start, where we talk about the status of women–or lack thereof–in Silicon Valley.

The occasion was one of Sandberg’s regular gatherings, which she organizes at her home in Atherton, Calif., and which she calls “Women of Silicon Valley.” (Alternatively, BoomTown has dubbed them “ladyfests.”)

The events feature a wide range of speakers, talking to a broad swath of typically high-ranking women technology executives from Internet, software and hardware companies, as well as from other walks of life, about a range of issues. This one was with political pundit and Web diva Arianna Huffington.

Please see this disclosure related to me and Google.

Was it just me or did you also get a bit of déjà vu upon reading a story today by the New York Times’s Laura M. Holson about yet another mash-up of a Hollywood talent agencies with Silicon Valley VCs.

That’s apparently what is happening with a new investment venture that includes the William Morris Agency, Accel Partners, Venrock and–filling out the unlikely foursome–AT&T (T), as a limited partner.

The focus of the investment fund will be to hand out cash–and, presumably, expertise–to digital media start-ups in Southern California.

While the Times drilled in on the presence of a big cellphone carrier–just the kind of company that my partner Walt Mossberg has dubbed one of the “Soviet ministries” for stifling innovation with overly controlling behavior in the mobile space–I am more focused on the rocky road of many such deals that have been struck in the past.

Now, I think all the players involved are very smart, including Accel’s Jim Breyer, Venrock’s David Siminoff and also William Morris CEO Jim Wiatt (as well as Morris’s Paul Bricault).

That said, a lot of sharpies have gotten sucked up in the past into the this-has-to-be-a-marriage-made-in-heaven dreams of the perfect Hollywood-Silicon Valley pairing.

Today, there are a number of interesting efforts, such as Comedy Central’s deal with the creators of “South Park” to create a joint-venture digital studio, as well as the better-known pairing of Sequoia Capital with the Will Ferrell-led Funny or Die comedy site (see my video interview with Sequoia’s Mark Kvamme about the site below).

And, of course, although nothing was actually settled, the recently ended writers’ strike was all about content revenues that might–or, perhaps more accurately, might not–be coming from digital sources in the future.

But if the past is prologue, this new group of investors might have to learn to be a bit patient.

Breyer acknowledges as much in the Times’s article. “There is always a fear, I know, that the bubble is about to burst when a parade of actors and actresses comes through my door,” he said, before noting, “this time the discussions are much more rational.”

I guess that is why the funding is in the tens of millions of dollars, the article noted, rather than the larger sums that have been spent in previous attempts to forge these kind of tech and entertainment alliances.

In fact, Holson herself penned a very good piece in 2002 about the failure of one much-touted experiment in such an integration–LivePlanet–between celebs Ben Affleck and Matt Damon and Redpoint Ventures.

That company was supposed to be a multimedia wunderkind, straddling the tech and media worlds with all sorts of gizmo-content wonders. One of its debut press releases in 2000 was, in fact, titled: “LivePlanet Unveils Integrated Media Concept–Entertainment Experiences that Span Traditional Media, New Media and the Physical World.”

Now, it is a shadow of that. According to a January article in Variety about the shuttering of its film unit, “LivePlanet evolved into a satellite company that [partner Sean] Bailey, Affleck and Damon would return to when not engaged in their own projects.”

In the 2002 piece, after a series of problems, including the bust of the dot-com bubble, Affleck himself got it dead right.

”If we stick around long enough and convince people we can do these things, we will matter in the new economy. I’d like to slip to the last page to see how it ends. But who knows.”

And, even six years later, who knows?

Here is the Kvamme video, in which he discusses Funny or Die:

Over the next week, I will be posting the most popular videos on BoomTown from 2007.

Here’s my personal favorite, which I call “I Heart Mark Zuckerberg.” It is a short and–let’s just say it, shall we?–deeply uncomfortable encounter BoomTown had with the Facebook founder and CEO.

(To be fair, we caught him completely unaware when he and Accel Partners’ Jim Breyer dropped by our table at Il Fornaio in Palo Alto, Calif.)

Here’s the video:

Why does the idea of a marriage between Hollywood writers and VCs make me slightly queasy?

But that’s just the feeling I got when I read the always sharp Joseph Menn of the Los Angeles Times, who penned an interesting piece earlier this week about writers in Hollywood turning to venture capitalists as the strike drags on.

Wrote Menn: “At least seven groups, composed of members of the striking Writers Guild of America, are planning to form Internet-based businesses that, if successful, could create an alternative economic model to the one at the heart of the walkout, now in its seventh week.”

That includes meetings with Silicon Valley VCs like Jim Breyer of Accel Partners, whose investment in Facebook gives it insight into the creation of new audiences.

The hope for the–let’s just say it, shall we–unnatural pairing of tech VCs and Hollywood folks?

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On my journey through the Europe Web scene, a stop at the Paris offices of Netvibes is a must, as it most resembles a Silicon Valley start-up. It has aimed at becoming the personal Web aggregation play and is among the more interesting and entrepreneurial in Europe.

The company was founded by former journalist Tariq Krim in 2005, who ran it with longtime European entrepreneur Pierre Chappaz until he left this past summer to work on another company called Wikio.

Netvibes is funded by the European VCs of Accel Partners and Index Ventures , as well as a smattering of U.S Web players like Marc Andreessen and others, to the tune of about $16 million.

Using a customizable ecosystem that allows a user to include any Web app–such as widgets, feeds, email, videos, blogs and now social-networking apps too–its goal of creating the personalized home page puts it in competition with other sites like Pageflakes, iGoogle and, of course, MyYahoo.

The site has upward of 12,000 feeds of all kinds and about 10 million registered users, aiming to make money via revenue sharing on the various apps used.

The business plan and the whole space, of course, is still developing, as a variety of players compete to become your first stop on the Internet with hopes of finding new ways to monetize that experience.

But here’s Netvibes CEO Krim discussing the whole thing:

What can we say about investor Peter Thiel, when it is much better to listen to him talk?

Here’s a longish video I made at Thiel’s office on San Francisco’s Presidio (no Sand Hill Road mundanity for Peter!) yesterday with the man who has become Silicon Valley’s most interesting venture capitalist and all-around great character of late.

Now running the VC firm called the Founders Fund, as well as a hedge fund called Clarium Capital Management, Thiel has a lot to say about everything from the painfully slow decline of old media (likening them to train companies in a plane world!) to the underhyping of Web 2.0 companies like Facebook (a 10-times-10 valuation from its current $15 billion if the hot social network, in which he was the first investor, keeps up its torrid pace of growth!) to the state of venture capital (needs a shake-up!).

My favorite quote from the interview comes from Thiel right at the end: “There’s absolutely no bubble in technology.”

Read more »

Please see this disclosure related to me and Google.

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.

“Why,” said a sharp Silicon Valley figure to me last night, “would Facebook give away the cow for the price of a quart of milk?”

Why, indeed, although it would be a $15 billion quart of milk.

But it was an interesting point he was making about the situation the hot social-networking site finds itself in right now, as it juggles how and in what manner to complete a round of funding it has been considering to tide it over before the IPO its investors have publicly said it is in line for in 2009.

In fact, there are a lot of interesting issues swirling around the Facebook funding deal and, thus, it’s time for an update!

First, Facebook, which has been basically floating this funding trial balloon to see what surfaces–much as a savvy Washington pol would an issue–is still debating whether to take such an investment and trying to determine what such a move would mean.

Is it just a way for the fast-growing platform to get money for critical expansion, to press forward with innovation and momentum and to even make acquisitions?

Or is it actually kind of an amateur move that will result in the early execs, especially founder Mark Zuckerberg, regretting the decision to sell out a piece of the potential moon shot of a start-up too early? If Zuckerberg and others really believe in their vision, goes this line of thought, why sell itself cheap now?

Or is this valuation, which is all about potential and not performance, simply insane?

According to my sources close to the company, in any case, it is pretty obvious Facebook will still not turn back now, given the level of interest from a wide range of investors, from investment banks to private equity funds to hedge funds to other VC outfits to big media companies.

Such an amount of money, if the valuation remains at $15 billion, for some chunk of the company (the size of which is also being debated), would give the company a cushion to figure out and perfect a truly powerful and innovative business model.

Facebook, many have observed, is somewhat like Google just before that company got its magic bullet with the perfecting of its AdWords product back in 2002.

Second, the principal activity around the possible investment centers, said sources, on two major tech players. As has been reported here and elsewhere, one is Microsoft, of course, which is Facebook’s ad-serving partner and which currently delivers the company a sweetheart guaranteed ad revenue payment of about $75 million annually.

But the second, said sources, is not, as might be expected, Google. It is, in fact, dark horse Yahoo.

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An interesting new site debuts today called Global Grind–an aggregation and destination site aimed specifically at the hip-hop community–that combines what looks like the widgety NetVibes home-page approach with a hipper version of Digg plus a lot of curated content-pointing.

It’s not so different in its technology or even its look (see below)–you could swap out its hip-hop content with, say, parenting-oriented stuff and have Mommy Grind instead. It is free and ad-supported and hopes to grow via viral methods (blah, blah, blah).

But the move to ever more niche-oriented social-networking type offerings for users is definitely a development to watch. With giant sites like Facebook and MySpace becoming as generic as Yahoo and AOL of old, more and more sites will be looking for an edge by drilling down deeply to serve a highly targeted audience.

This is, of course, back to the future in concept. Many years ago, a plethora of sites were aimed a specific demographic groups–gay sites, Hispanic sites and also African-American sites–and boomed in popularity.

But most of those have seen a falloff lately, as the traditional portal approach has given way to the social-networking paradigm of hyper-community and interactivity.

Promising to deliver “your Web filtered fresh”–don’t ask me what that means, as I am what you might call anti-hip–Global Grind will aim at a wide-ranging audience that identifies with the hip-hop culture, well beyond simply music. The site’s creator, Navarrow Wright, said there are about 24 million people in the U.S.–across all demographics–who do.

“We want to become an aggregation epicenter,” said Wright (who used to run technology for BET.com) in an interview with me yesterday. “It is all about distributed content and getting audiences the information they value.”

I would agree.

Also interesting is Global Grind’s mix of investors–hip-hip impresario Russell Simmons and Accel Partners Jim Breyer (who trumps me in the anti-hip department, it must be said).

“My entire life has been about promoting the best talent and important causes, and I was amazed at how Global Grind was building an online destination to do just this and was using technology in a really innovative way,” said Simmons.

“The theme fits with our view that there is enormous investment opportunity in content and advertising networks that target specific audiences through the creation of an owned and operated hub combined with spokes or affiliates,” wrote Breyer to me in an email. The formation of grassroots micro-communities and Web 2.0 infrastructure is allowing these new media models to evolve.”

Now that’s some fresh geekspeak for you!

Oh, my.

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.

I have known Simon Levene for a long time–he’s been working in the European operations at a handful of Web companies, such as @Home, Time Warner and Yahoo, over the years and is now working as a venture partner at the European branch of Accel Partners, the Palo Alto, Calif., backer of Facebook and other Web 2.0 companies. The London office has about $500 million under management.

Levene always has a sharp view of the scene and is often sharp-tongued–exactly how I prefer my VCs. In our talk, he liked mobile–one must in cellphone-heavy Europe–but not so much widgets, which earned him my undying gratitude for saying so.

Here is my video of him talking about the venture landscape in Europe:

In my post–OK, diatribe–yesterday about Facebook and the dangers of it getting so much of the wrong kind of media attention, I neglected to also mention an interview its ubiquitous founder, Mark Zuckerberg, did with the “Today” show’s Meredith Vieira in mid-June.

Since NBC will not let me embed it and it has not hurtled over to YouTube yet, here’s a link to the short chat, in which Zuckerberg did acquit himself well and Vieira not so much (did she have to resort to the what-will-those-crazy-kids-think-of-next attitude and can she really be that perplexed by what the social-networking site might offer someone over 25 years old?).

Still, it is more of the same kind of fluff that needs to be replaced by a rigorous look at the company’s business strengths.

In that vein, the always entertaining Owen Thomas, Valleywag’s newest, I guess, um, Wag, floated an interesting notion in this post that Jim Breyer (pictured here, with his doppelgänger Tony Soprano) of Accel Partners–the big venture backer of Facebook–might use his inside track to measure the popularity of third-party application developers now proliferating on Facebook.

And then, in a move that would make Ma Soprano proud, Breyer would muscle the winners into accepting his investment dollars on his terms.

Thomas also speculates–with no actual proof, although I was riveted by the story line–that Breyer would unleash the specter of uncooperative apps makers getting quashed by Facebook, if they did not acquiesce to his nefarious demands.

Even though I have known Breyer a long time and it is my definitive impression that my 5-year-old son could handily best the doe-eyed VC in a fair fight, it’s apparently always the quiet ones you have to watch out for.