Last week Facebook reportedly borrowed $100 million in venture debt to pay for new servers. The company has continued to have a high demand of servers as it has become the largest site for sharing photos and has also opened up the ability to share videos as well. According to Facebook’s VP of Technology, the company is currently using over 10,000 servers including over 1,800 MySQL database servers.

The money will be used by Facebook to purchase another 50,000 servers. While this sounds like a large number, Google is currently consuming over half a million servers each year whereas Microsoft is consuming 200,000 servers each year. Facebook’s new server acquisitions will enable the company to run safely for at least another year or two according to a BusinessWeek article from last week.

Henry Blodget thinks that the reason that Facebook raised money was because they couldn’t sell anymore stock at a $15 billion valuation. In my opinion this is simply speculation.  Using debt to acquire new servers makes a lot of sense. This is a typical practice for fast growing startups. As Blodget points out, “The owners of Facebook common stock, for example, now have at least $350 million of claims that have to be paid out of whatever Facebook is ultimately sold for before they get a dime.” That shouldn’t be a problem though if Facebook has a public offering at anywhere near the $15 billion valuation Microsoft placed on the company.

I think this news emphasizes a thriving company that needs capital just to keep up with their growth. This is a textbook definition of the type of companies that VCs love to invest in. Hopefully Facebook doesn’t need to buy another 50,000 servers anytimes soon!