Google and Facebook allegedly discussed acquiring Twitter for $8 billion to $10 billion, a deal that would give either company a powerful social communications tool with 200 million users.
Google,
Facebook and others continue to be interested in buying Twitter, a microblog
service whose value increased with the introduction of ads linked to short
messages in 2010.
Google and
Facebook, whose rivalry has grown more intense as the social network has lured
eyeballs from the search giant, have reportedly broached the notion of
acquiring Twitter for $8 billion to $10 billion, according to
The Wall Street Journal.
Twitter
declined to comment on what it called "rumors." Still, those are
lofty valuations for a company that earned $45 million in 2010, mostly from its
fledgling ad business.
It's also more
than double the company's estimated worth as of December, when it
banked $200 million in venture capital funding,
valuing the company at $3.7 billion. Andreessen Horowitz also reportedly just
pumped $80 million into the company.
The pricey
offers are predicated on potential upside, not unlike that of local deals
Website Groupon, which spurned a $6 billion buy-out offer from Google to take
$950 million in funding to grow.
Twitter has
200 million users and, according to eMarketer, is on pace to
make $150 million in advertising, or triple its
2010 earnings, in 2011.
The ad revenue
could be greater if Twitter continues to successfully drive its Promoted
products suite and launches its self-serve platform en masse this year.
Launched last
April under the aegis of Twitter CEO Dick Costolo, Promoted Tweets allows
companies to pay for tweets hawking their products on a CPM (cost per mille) basis,
or per thousand people who see their tweets.
Promoted
Trends features a company or product name in the trending topics on Twitter.
The newest ad offering is Promoted Accounts, which are suggested based on a
user's public list of whom they follow. All these products have proven their
worth.
One would be
tempted to take the acquisition talks lightly, given Twitter's management-including
co-founders Evan Williams and Biz Stone, as well as Costolo-has pledged to
build an independent business, perhaps becoming a $100 billion public company,
according to the Journal.
As for the
suitors, one could easily argue Google is in much greater need of a social-communications
tool than Facebook. Google's + 1 social-layer service is allegedly months away
from emerging, and Facebook continues to build user engagement,
beating out Google, Yahoo and Microsoft in time
spent online in 2010.
Facebook isn't
in dire need of generating traffic or a social-communications tool, so the
smart guess is Facebook is talking just to up any prospective bid from Google
or anyone else.
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