Moscow is a city with more resident billionaires -- 101 -- than any other place on earth. Beneficiaries of Russia's new wall of wealth include French Riviera real estate agents, posh British boarding schools and trophy mistresses of various nationalities. Never, until recently, has the roster included a crown jewel of American capitalism: the intellect-driven growth companies of Silicon Valley. Yuri Milner changed all that.

In January 2009, Milner, head of a then-obscure investment fund called Digital Sky Technologies, flew from Moscow to California, offered Mark Zuckerberg $200 million for a 2% stake in Facebook Inc. and flew back. He attached few if any of the strings a more seasoned venture capitalist would claim: no board seat, no army of accountants combing through the books, no tortuous legal agreements. The old crowd on Sand Hill Road ridiculed him as a nouveau riche hayseed. Today? Not so much.

The $10 billion valuation Milner put on the social network famously grew to $50 billion by January 2011 when Goldman Sachs Group Inc. bought in with its own innovative structure. Milner's DST, which kept buying bits in the interim, had by then amassed 10% of Facebook for an estimated $800 million, delivering a paper profit over two years of $4.2 billion. By the time Goldman arrived on the scene, Milner had cashed out much of his equity, and the majority owner of the Facebook investment was metals billionaire Alisher Usmanov.

Milner has ridden a still more powerful speculative wave with online discount arranger Groupon Inc. In April 2010, DST put in most of a $135 million financing round that reportedly valued the company at about $1 billion. By December Groupon was fending off a $5 billion-plus acquisition offer from Google Inc., and the latest news is it could go public at $25 billion. In between, in December 2009, Milner poured $180 million into Zynga Inc., which controls the "FarmVille" game played via Facebook. "Yuri has the conviction of his trades," says a Moscow expatriate who has known him since the 1990s. "In a rising market, that can be a great benefit."

Milner, 49, is not an oligarch. He never wangled an oil company or iron mine from the Kremlin at knockdown prices or formed a private army to protect his family. But he has been close to two of the richest and toughest of them. In the 1990s he worked for Mikhail Khodorkovsky, who acquired Yukos Oil Co. and later gained fame as Russian business' most famous martyr to then-President Vladimir Putin. (Khodorkovsky received a second long jail sentence while Google was courting Groupon last December.) Milner's financial partner now is Usmanov, who served six years himself in an Uzbek prison on a conviction that was later overturned. Usmanov then built a Russian metals empire worth an estimated $17.7 billion while simultaneously heading an arm of OAO Gazprom, the state-owned natural gas monopoly. A native Muscovite, Milner was in a sense born to be a bridge between Russian and Western business. His father was an expert in American management, one of a select coterie of Soviet intellectuals cleared for exposure to such exotic knowledge. Young Yuri studied physics at the prestigious Moscow State University during the 1980s. In the early '90s, he took an M.B.A. at the Wharton School and worked for three years at the World Bank in Washington.

A native Muscovite, Milner was in a sense born to be a bridge between Russian and Western business. His father was an expert in American management, one of a select coterie of Soviet intellectuals cleared for exposure to such exotic knowledge. Young Yuri studied physics at the prestigious Moscow State University during the 1980s. In the early '90s, he took an M.B.A. at the Wharton School and worked for three years at the World Bank in Washington.

Khodorkovsky brought him back to Russia in 1995 to head a would-be investment bank called Alliance-Menatep CJSC. Conspicuously short and whip-smart, in the brawny new world of Moscow money, Milner relied on nerve and a silver tongue. "Yuri was always very persuasive in English or Russian," a colleague at the time recalls. "He is half my size, but several times he talked us out of situations in nightclubs that might have become really dangerous."

Alliance-Menatep blew up after the Russian financial crisis of 1998. While his own country spun into renewed chaos, Milner again looked West. Observing the raging dot-com boom, he decided it would eventually reach Russia. He managed to raise $2.25 million from New Century Holdings Inc., a New York-based investor that was an early believer in Russia, added $750,000 of his own savings and launched a tech investment fund called NetBridge.

Milner backed a few Russian clunkers -- an Amazon clone called 24x7 proved ahead of its time in a country without credit cards -- but by the mid-2000s he was on to a good thing with Mail.ru, the country's top portal, which has since incorporated the most popular online games, too. He bought out the Russian-language version of Classmates.com, Odnoklassniki.ru, and acquired 33% of Vkontakte ("In Contact"), a social networking site that is locally eating the lunch of -- Facebook. Milner bundled these properties into Mail.ru Group Ltd. and raised $912 million in a London IPO last November, one more triumph.

But it was partnering with metals billionaire Usmanov in 2008 that gave Milner global reach. Usmanov bought 27% of Mail.ru for $350 million. (The company's current capitalization is more than $6 billion). He also backed a new private equity fund called DST Global, reportedly controlling 75% of it. Most of the Facebook holding, 7.6% of the company's outstanding shares, has been acquired by this vehicle. The remaining 2.4% stake belongs to Mail.ru.

Son of a top Uzbek Communist-era official, Usmanov, now 57, studied at the ultra-elite Moscow State Institute for International Relations. Back home in Uzbekistan in 1980, he was charged in an official bribery conspiracy and incarcerated until 1986. Usmanov has insisted he was framed, and a court expunged his criminal record in 1989.

He emerged in 2000 as head of Gazprominvest, an arm of Gazprom, which was swapping unpaid bills for equity stakes in deadbeat factories. About the same time, Usmanov started acquiring a string of iron ore foundries and steel mills with private partners through a vehicle called Gazmetall, now merged into the Metalloinvest holding. Among the high officials whose ear Usmanov is supposed to have: President Dmitri Medvedev, who chaired Gazprom before his promotion to head of state.

Milner lost control of his business when he brought in Usmanov and Naspers Group, a South African media company that bought a big chunk of Mail.ru back in 2006. Milner cashed out most of his remaining stake in the public vehicle during last year's IPO. All the company's founders and managers together now own less than 12%, according to Mail.ru's website.

In return for selling his equity, Milner got up to $1 billion of Usmanov's cash to dangle before the Mark Zuckerbergs of the world, and he lost no time putting it to work. His low-maintenance investment style has made him an instant favorite among tech entrepreneurs. "DST is just cool," raves Groupon CEO Andrew Mason.

Milner departed from standard private equity procedure again this January, showering (dribbling, by his standards) $150,000 on each of 43 companies that completed the annual incubation program at Silicon Valley's Y Combinator. His partner in this mass seeding was famed "super angel" Ron Conway.

Financiers counter that standard crabby due diligence serves a purpose and wonder whether Milner's model is sustainable past a few bold early strokes. "Allowing people to take big money off the table before the IPO arguably encourages them to pay less attention to the business," says Bernard Sucher, a veteran expat Moscow banker who is now a board member at Aton Capital brokerage there. "It also breaks the model that your VCs get just as rich as you."

Milner also looks less cool to colleagues in the narrow circle of Russian Internet players. People close to Yandex, the search engine that has beaten back Google to become Russia's top online company (Mail.ru is No. 2) complain that Milner has pressured them toward an unwanted merger, deploying as leverage Usmanov's deep pockets and implied state connections. One Yandex source likens Milner to "The Social Network" version of Zuckerberg without Zuck's good points: "Compared to the movie character, I would say Milner lacks the fresh-faced charm."

The Digital Sky founder also faces revolt from Vkontakte shareholders against his presumed desire to fold that burgeoning site into Mail.ru. Vkontakte's founding CEO, Pavel Durov, recently published an open letter describing such a merger as "utopian." Ironically, Milner's fantastic success with Facebook may be jacking up the price he and/or Mail.ru has to pay for the Russian copy.

But if Facebook and Groupon do go public at anything like currently discussed prices, all that will be a footnote to two very lucrative investment calls. Even if Milner and Usmanov never repeat success on such a scale, they have opened the door to global tech investing for other Russian billionaires used to trusting their instincts and taking big swings.

Next in line, oligarch watchers speculate, may be Mikhail Prokhorov, another metals magnate who is still richer than Usmanov with $18.8 billion of net worth, much of it in cash. Prokhorov already owns Russian financial information service RBC and his own social network, Snob.ru.

Unlike Milner, Prokhorov looks for takeover targets that are in distress. He used the financial crisis for acquisitions as varied as the last-place New Jersey Nets basketball team and liquidity-starved Moscow investment bank Renaissance Group. He may well swoop in when tech bubble 2.0 bursts.