Ka-ching! for Facebook - love from Ka-shing

I recently added Hong Kong billionaire Li Ka-shing as a friend on Facebook. I wish Asia's richest man were my friend, but I was just curious to see what his status would say. "Just spent $60 million on Facebook...hope it gets me some decent returns!"

Well, Mr Li is not alone. He is joined by the world's richest man Bill Gates in putting his faith in the social networking site. Just last month, Microsoft injected $240 million for a 1.6 per cent stake in Facebook, and Mr. Li's investment purportedly amounts to 0.4 percent.

Big bucks for a puny stake, but it would only make a small dent on Mr Li's estimated $23 billion fortune. With a business empire spanning ports, telecoms, retail and property around the world, he is widely-admired for his dealmaking and investing. A stake in Facebook is probably a strategic one to ride the social networking boom around the world. And it could pave the way for more multimedia partnerships with Tom.com, a mobile internet company also backed by Mr Li.

I think the investment is more important for Facebook, as it grows into China where internet usage among youths is booming. Like they say in Asia, who you know is just as important as what you can do. It's a hope that having the Li Ka-shing connection could open many doors for them, especially if it wants to jumpstart its presence in the country through acquisitions.

It also helps that the new investor will be pretty much hands-off in its business plans.

The All Things Digital blog, which broke the news, writes:

"Facebook, according to sources, is still planning on raising more investment dollars, although some once-hot prospects, such as Providence Equity Partners, have dropped out due to the onerous terms Facebook has demanded from investors.

While both Microsoft and Li have agreed, for example, Providence was put off by the lack of downside protection and also the fact that a major investment in Facebook would not get them a seat on the board of the start-up. Neither Microsoft nor Li will get a Facebook board seat."

Having said that, it doesn't mean things will be smooth-sailing for the company in China. Its social networking counterpart MySpace launched its China site in April and already, there are rumblings about censorship and tight regulations by the authorities. For all of Mr Li's influence in the region, it will still be tricky for Facebook's China debut.

Then there is the touchy issue of trying to extract more advertising dollars from a Facebook community adverse to infringements on their privacy. Will an investment by a corporate mongul like Mr Li mean that Facebook users are in for more advertising?

Probably so. But then again, maybe he's just waiting for Facebook to do its IPO so he can cash in on what will surely be humungous gains. Of course, if Mr Li adds me on Facebook, I can always ask him that.