Will Google or Facebook Buy Twitter?

February 11th, 2011 by Staff

www.pcmag.com – Google and Facebook have been in acquisition talks with Twitter, according to a Wednesday report from the Wall Street Journal, and these chats value the micro-blogging site at an estimate $8-10 billion.
That, however, could be a very generous estimate, the Journal said. According to “people familiar with the matter,” Twitter’s 2010 revenue totaled roughly $45 million. But due to the cost of hiring new staff and adding more data centers, Twitter actually lost money. In 2011, the Journal said that Twitter expects to make roughly $100-110 million.
Ethan Kurzweil of venture capital firm Bessemer Venture Partners told the Journal that these valuations aren’t “justifiable based on financial multiples” but that Twitter’s social service has culled a lot of useful data about its users and “the market is valuing that mightily right now.”
When Twitter ended a $200 million funding round in December, it was valued at $3.7 billion. Since then it has also received some support from venture capital firm Anreessen Horowitz in the form of an $80 million investment. The firm’s portfolio also includes high-profile tech companies like Facebook, Foursquare, Groupon, Zynga, and Skype.
The Journal said that Twitter’s value has surged in the past two years. In February of 2009, it was valued at $250 million, and in September of the same year, it was estimated to be worth $1 billion. That would make sense, considering a recent study from Sysomos said that 95 percent of Twitter accounts were made since January of 2009.
Since Twitter launched in 2006, it has grown considerably, especially in the past year. It now has nearly 200 million registered users. In December, the company confirmed that it has tripled the number of employees it had just 12 months ago. With a staff of about 350, the company is reportedly searching for a new office, potentially outside of its native San Francisco.
The talks with Facebook and Google aren’t new, the Journal said. Communication has been ongoing and open, with both companies expressing a “latent interest” in Twitter.
A spokesperson from Twitter declied to speak on the matter. Representatives from Facebook and Google did not respond immediately to a request for comment.

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