Facebook Borrowing to Scale Up Servers: $100,000,000. Facebook Stock: Priceless?

Facebook has announced that it will borrow $100 million to purchase new servers. This report suggests they are scaling up from 10,000 servers to about 60,000. Assuming Facebook Connect is widely adopted (and it probably will be) it does make sense that the server loads may go up dramatically.

So why did they borrow that money rather than just sell more stock? Silicon Alley Insider suggests, I think correctly, that it is because nobody is foolish enough to value Facebook at the whopping $15 billion that earlier deals were *rumored* to have been based upon. In fact Henry Blodget suggests that the Hong Kong deal did *not* value the company at 15 billion. I've noted before that Microsoft was probably not all that concerned about the monster theoretical valuation they gave to Facebook with the $240,000,000 investment - rather they were after foothold and ongoing advertising and partnership agreements.

So, with Facebook poised to lose a lot of money in the coming months to years, what will be their ultimate future? Without some huge breakthrough in their pitiful social networking advertising yields, the answer may not be all that Facebook friendly.