East Asia’s richest man, Li Ka-shing, has pumped another $60 million into the social networking site Facebook run by Mark Zuckerberg, a fellow billionaire if one less than a third Li’s age.
Li said during a Hutchison Whampoa earnings conference call on Thursday that he was upping his previous $60 million investment, made last November and which gave him 0.4% of the company. But he didn’t say by how much, and clearly no one thought to ask him. Reuters has now run down a number.
What does Li hope to get for his $120 million? One clue comes from what he said on Thursday, that he saw some synergy between Facebook and the 3G services of Hutch’s mobile phone business. That makes some sense given that China has 465 million mobile phone users but only 172 million Web ones.
And while Facebook is having a hard time figuring out how to make money out of all the users of its Web site, you don’t need to be a rocket scientist to make money off IM and SMS mobile phone services. Just look at Tencent/QQ. In 2007, at $523 million, it had four times Facebook’s revenue, with a fifth of that coming from mobile services. Tencent also reported a $224 million operating profit last year. Facebook lost $50 million.
Li has a head that is both old and wise. If he can crack the China market for Facebook that $15 billion valuation on Zuckerberg’s site won’t look quite so mind-boggling.