In 1990, Yuri Milner became the first Soviet citizen to study at the respected Wharton School of Business at the University of Pennsylvania. His idea, he said then, was “to be in the most useful place in the proper time”.

Nearly 20 years later, he has fulfilled that aim, emerging at the leading edge of the Russian internet industry. Digital Sky Technologies (DST), his company, made headlines this week with a $200 million (£125 million) investment in Facebook, the world’s biggest online social network. It was DST’s first big move outside the Russian-speaking sphere: DST, a private investment fund run by Mr Milner and two partners, has invested nearly $1 billion in East European internet companies, making it by far the biggest player in the sector in Europe.

DST holds extensive interests in Russia’s leading email portal Mail.ru, its social networks Odnoklassniki.ru and Vkontakte.ru (a Facebook clone) and the dating site Mamba, along with a variety of other sites. Russia’s internet audience is Europe’s fourth-largest behind Germany, Britain and France, according to comScore.

After announcing the Faceboook deal, Mr Milner spent two days mingling with top technology and media industry figures at the All Things D conference run by The Wall Street Journal in Carlsbad, California. For a short time, indeed, he was the star attraction.

He told The Times that the future of the internet was social. “We grew up with email – Russia is growing up with social networks. The people are going online for the very first time today: they are skipping email altogether, they are going straight for social networks. Our experience in Russia tells us to believe that Facebook will become one of the, if not the, most valuable internet company in the business,” he said.

Facebook, which has yet to work out exactly how to make money from its 200 million members, was the perfect vehicle for DST and would soon be profitable, Mr Milner said.

“We are seeing a fundamental trend on this in Russia – all our businesses are profitable and we believe that the consumption of advertising online will change. Google started this revolution and social networks will continue it. Social networks will allow advertising to be much more targeted.”

Born in Moscow in 1961, Mr Milner studied theoretical physics at Moscow State University. He did research in elementary particles at the institute of physics in the Russian Academy of Sciences between 1985 and 1989 and also worked for an independent company – his first taste of private business. He headed to Wharton, then to the World Bank in Washington, where he was involved in the development of the financial sector in Russia.

He returned to Russia in 1996 and was responsible for the first tender offer for a public company in postSoviet times. He started investing in the internet sector in 1999. “I was looking for ways to make use of my background,” he said. “By that time, [state] privatisation was over. You really had to do something else, basically start a company from scratch.”

He set up an investment company, DST’s precursor, with Gregory Finger, a friend who previously headed the Moscow office of NCH, the hedge fund. Between 1999 and 2005 they invested up to $20 million in the nascent Russian-speaking internet scene.

The company has grown rapidly and acquired some big-name backers.

These now include Renaissance Partners, Tiger Global and Goldman Sachs. The most notable shareholder is Alisher Usmanov, the Russian steel tycoon, who reportedly has a 32 per cent stake in the private investment fund. Born in Uzbekistan, the billionaire is best known in Western Europe for being a 25 per cent stakeholder in Arsenal, but he also has other media and internet assets in Russia. “He is playing a passive role as an investor,” Mr Milner said.

The chief executive of DST also serves on the board at Mail.ru, which has 50 million users, vKontakte and Forticom, which operates social networks in Poland, Russia and the Baltics. Mr Milner estimates that DST companies comprise well over 70 per cent of all page views in the Russian-speaking internet.

His first big step on to the international stage with the Facebook investment raised some eyebrows. Paying $200 million for a 1.96 per cent stake valued the American company at $10 billion, $5 billion below that of a Microsoft investment in 2007 and far above that of analysts estimates. DST is also investing more than $100 million in common stock from existing employees and investors in another round. This will be at a lower price.

As a Wharton MBA student Mr Milner said that he wanted to build bridges between Russia and the West: he and Mark Zuckerberg, the founder and chief executive of Facebook, appear to have hit it off during their six-month negotiations. In business, for Mr Milner, it is all about social networks, in every sense.