A Russian Internet company has invested 200 million dollars in Facebook in a deal that values the US social networking giant at 10 billion dollars, the companies announced.

Besides purchasing a nearly two percent equity stake in Facebook, Digital Sky Technologies (DST) is also offering to buy at least 100 million dollars of common stock held by current and former Facebook employees, they said Tuesday.

Facebook said DST, however, would not be represented on the board of the fast-growing social network, which signed up its 200 millionth member recently but has yet to turn a profit.

DST's purchase of a 1.96 percent stake in preferred stock in privately held Facebook is the largest cash-raising exercise by the Palo Alto, California-based company in two years.

US computer software giant Microsoft bought a 1.6 percent stake in Facebook for 240 million dollars in 2007, a deal that at the time valued the company at 15 billion dollars.

While its number of users has grown at an amazing clip, Facebook, unlike other Web giants such as Amazon, eBay, Google and Yahoo!, has yet to prove how it is going to translate traffic into cash.

DST chief executive Yuri Milner said he expected his company's experience running social networks in other countries would prove profitable to Facebook.

"We've invested in five social networks in Europe," he said in a conference call. "They've been able to monetize better than Facebook because the companies are further along the curve.

"We believe the same path will follow for Facebook," Milner said.

Facebook chief executive Mark Zuckerberg said he was "really looking forward to learning more about how these models are working in Europe and Asia.

"A lot of the investment is based on the theory that Facebook is still growing our different business lines," he said.

"Right now, online and direct sales are the ones that are growing quickest, but over time we expect to be able to grow a large number of these things."

Zuckerberg, 25, who founded Facebook five years ago while a student at Harvard, declined to release figures but said Facebook's revenue growth was "greater than 70 percent year-on-year, even in this economic climate.

"We expect that we'll be cash flow positive some time in 2010," he said. "That means this relationship is purely buffer for us."

In a statement, Zuckerberg said "a number of firms approached us, but DST stood out because of the global perspective they bring -- backed up by the impressive growth and financial achievements of their Internet investments."

Milner said DST's "investment experience in other regions reveals the tremendous value social networking companies create as they redefine how people communicate and interact.

"By every important metric -- user growth and engagement, technological innovation and financial performance -- Facebook is on a similar trajectory, though on a much more global scale," he said.

Privately held DST, which is based in Moscow and London, holds significant interests in Web companies in Russia and Eastern Europe such as Mail.ru, Forticom and vKontakte, according to the joint statement.

DST?s main assets account for more than 70 percent of all page views on the Russian-speaking Internet and its social networks are the market leaders in more than 13 countries, it said.

DST is around 32 percent owned by Russian billionaire Alisher Usmanov, the Russian business daily Vedomosti reported.

A metals tycoon who was ranked in May as Russia's 26th richest man by the Russian edition of Forbes magazine, Usmanov also owns a stake in the English football club Arsenal.

Other minority shareholders in DST include Goldman Sachs, the US fund Tiger Global Management and the Moscow-based investment bank Renaissance Capital, Vedomosti said.