Facebook's friend in Russia

DST's Yuri Milner makes big bets on social media companies and brings new clout -- along with a mysterious oligarch backer -- to Silicon Valley.

Yuri Milner has 50 friends on Facebook. Mark Zuckerberg is one of them. They met a couple of years ago when Zuckerberg, the Facebook founder and CEO, was trying to learn more about a Russian social network that Milner partly owned. Then, in the spring of 2009, Zuckerberg sold Milner 2% of Facebook for $200 million.

At the time, more than one Silicon Valley insider wrote the investment off as dumb money. Zuckerberg knew better. Milner and his partner, Gregory Finger, had built Digital Sky Technologies from a small Russian investment venture to a holding company that controlled the businesses behind 75% of the pages served on the Russian-speaking web. And because the online-advertising market is far less robust in Russia than in the U.S., DST's companies had already found ways to make money that U.S. companies hadn't tried. "I talked to a bunch of different [venture] firms and I spent time with [Milner] and I was like, this guy is clearly smarter and more insightful and has more experience in what we are doing," Zuckerberg tells Fortune. It helped that Milner, 48, offered great deal terms: His investment valued Facebook at $10 billion, an eyebrow-raising amount at the time, and he didn't ask for a board seat or any other special privileges.