Twitter 'in early talks with potential buyers Facebook and Google'
Loss-making micro-blogging site now valued at $10bn
Twitter has been holding talks with potential suitors, including Facebook and Google, which could value the micro-blogging site at $10bn (£6.2bn), reports suggest.
The early talks are not believed to have progressed far but, according to the Wall Street Journal, one thing has been agreed: the loss-making firm is worth somewhere between $8-10bn.
Twitter is a private company and does not disclose its revenues. Last year it is estimated to have had revenues of $45m but ended the year making a loss as the firm spent money on hiring staff and new data centres. This year Twitter's revenues are expected to more than double to between $100-110m.
The new valuation would be a significant leap for Twitter. Last December it raised $200m in funds from Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers and existing Twitter investors. The deal valued the firm at $3.7bn. But since then investors have shown a fierce appetite for the new wave of internet companies and the valuations of its peers have soared.
Facebook recently raised $1.5bn of financing in a deal that valued the social network at $50bn, up from $10bn in mid-2009. Goldman Sachs briefly offered its top-tier customers the opportunity to invest in Facebook, but the bank was so overwhelmed by requests and publicity that it had to withdraw the offer for fear of breaching financial regulations on private placements.
Groupon, the online discount company, is also planning an initial public offering. The Chicago-based website has rejected a $6bn takeover offer from Google. And LinkedIn, the business-oriented social network, is planning an IPO that could value the company at over $2bn. Zygna, maker of the phenomenally popular Farmville online game, also aims to issue shares.
There have also been a number of new media buyouts. The most prominent came earlier this week when AOL paid $315m – $300m of it in cash – for the Huffington Post, about 10 times the media company's 2010 revenues.
Both Google and Facebook are believed to have discussed a bid for Twitter in the past. Facebook founder Mark Zuckerberg is believed to have offered Twitter's founders $500m in Facebook stock for the company in 2008. The deal collapsed.
Twitter now has around 175m registered users worldwide, who send 95m tweets a day.
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