Is Facebook Already a Public Company?

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Once again, Mark Zuckerberg has said that Facebook, the wildly popular social network, will not go public any time soon, until 2012 at least. But the question, at least from Zuckerberg's point of view, seems increasingly meaningless. Last night, the New York Times reported that Facebook has hauled in $500 million in an investment round led by Goldman Sachs. The deal values Facebook at a jaw-dropping $50 billion, and it opens the door for other investors to put money into the company:

As part of the deal, Goldman is expected to raise as much as $1.5 billion from investors for Facebook at the $50 billion valuation, people involved in the discussions said, speaking on the condition of anonymity because the transaction was not supposed to be made public until the fund-raising had been completed.

In a rare move, Goldman is planning to create a "special purpose vehicle" to allow its high-net-worth clients to invest in Facebook, these people said. While the S.E.C. requires companies with more than 499 investors to disclose their financial results to the public, Goldman's proposed special purpose vehicle may be able get around such a rule because it would be managed by Goldman and considered just one investor, even though it could conceivably be pooling investments from thousands of clients.

The deal is significant, first and foremost as a validation of Facebook's prowess. As the Times story notes, the company now attracts more monthly visitors than Google and is more valuable than tech and media heavyweights like Time Warner, eBay, and Yahoo.

But it's also interesting as validation of a model that's becoming increasingly popular: Companies that are private only in name. Facebook shares have long been actively traded on SecondMarket, a New York financial services company that allows early stage investors and employees to sell their shares in privately held start-ups. (Inc. first wrote about SecondMarket two years ago.) The Goldman valuation of Facebook roughly corresponds to its valuation on SecondMarket. So much for valuations of privately held companies being some big mystery.

The SEC will surely have something to say about the idea of skirting reporting requirements with special purpose vehicles, but the deal seems like a watershed moment for SecondMarket, which is a fascinating success story on its own, and other buyers and sellers of privately held companies.

Senior contributing writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York. @chafkin