Digital Sky Technologies London partner Alexander Tamas and Facebook COO Sheryl Sandberg (pictured, right) met with a steady stream of reporters Tuesday afternoon, explaining why a company with lots of money wanted such a small stake in Facebook—and why a company that says it needs no money took a new $200 million investment. Tucked away in an alcove at the Four Seasons in Carlsbad, Calif., (with the Washington Post Co.‘s Donald Graham, a Facebook board member, sitting in but not participating), the three of us talked about international plans, acquisitions—none planned, says Sandberg, and, among other things, the obsession with IPOs.

—Why take the money?: Sandberg has heard all the stories—running out of cash, infrastructure costs too much, etc.—but she insists Facebook doesn’t need the money.  “Our revenue is doing incredibly well—70 percent year over year (growth) this year means that the ad products we’ve built are working, it means that all of our sales channels, all of our markets international and domestic are very healthy, and it means that our ad models are working.” But the economic downturn gave Facebook a new appreciation for having more funds available. Tamas: “We’ve done pretty detailed due diligence and I can tell right now the company does not need the money but I think it’s good for a company to have ‘optionality.’ You don’t want to be constrained by funding if you want to move quickly on something.”

—Why invest? Tamas prefers buying a very small stake in a big company instead of a big stake in a small company—and that’s exactly what his DST International did Tuesday by acquiring 1.96 percent of Facebook for $200 million. “For us, it was really the theme of social networking and that was driven by us seeing the success of the companies we have in all our markets. We’re invested in five different social networks that are #1 in 13 different countries.”

—Will Facebook do an IPO?: The IPO issue has been so omnipresent that Sandberg started to offer an answer before she realized I wasn’t asking. Tamas, who spoke as though he takes an eventual IPO for granted, wanted to talked about it: “Here people seemed to be obsessed with IPOs. There are hundreds of companies that went public way too early but not that many that went public too late. You do it when it’s right for the company and not be rushed into it. The IPO really is just a step in the proper development—it’s not an exit, it’s not a new beginning. It’s just a natural evolution and I think by trying to push that too hard on a company, you more disrupt than do good.”

—International opportunities: Sandberg admits that for Facebook being international used to mean being able to read the site in English from anywhere in the world. Opening up the translation console changed that. “The English-speaking is still very strong but the international growth has been explosive. Seventy percent of our users are international [and] we are continually looking to expand ... Our main attraction to DST is first, actually their experience in social networking and other associated properties. It’s not just about the markets they’re in; our really big concern is they have a number of properties that are monetizing a number of ways and having high user engagement. I think those are lessons we can learn from them that we can apply globally. I would say the second thing is their experience targeting these markets.”

—Valuation: Valuing Facebook has been one of the hottest parlor games around for years. Sandberg’s rationale for the drop to $10 billion from $15 billion: “We don’t really think it did [decrease] in the sense that when we did the $15 billion valuation ... 1) it was done in October 2007, obviously the market was very different back then. And 2) it was part of a strategic relationship with Microsoft (NSDQ: MSFT), so I think this valuation at this time compares very favorably with the Microsoft valuation. Tamas: “I think the valuation today reflects where the business is today. What people don’t realize is Facebook essentially has doubled in size in the past six months. It’s on a phenomenal trajectory so I think the valuation completely values the company as it is today.”

—Making money: Tamas insists people in the west “misunderstand completely” by focusing just on display advertising. “Display advertising on social networks just does not work well. We saw it ourselves … and that’s where everybody here stops, [saying] if display advertising on social networks doesn’t work than social networks can’t monetize. That’s so wrong.” His answers include micropayments, virtual items and social ads that allow subtle targeting rather than “Damn, here’s a big display ad and we don’t care who you are.” The internet has not quite caught up with the medium; The internet is still kind of in the television age.”

Photo Credit: Flickr/TechCrunch50-2008