-Updated 02-12-2011- The Wall Street Journal is reporting that in recent weeks executives from both Facebook Inc. and Google Inc., (GOOG) have been talking about the acquisition of Twitter. According to the WSJ, the potential suitors have placed an estimated valuation on Twitter of $8 billion to $10 billion. In case you weren’t paying attention, that is a 3x increase in three months since December 2010 when it was Twitter was valued at $3.7 billion.
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Imagine the Bizarro World where social networkers Facebook and Twitter hooked up. In a recent Financial Times interview with Twitter co-founder Biz Stone, he revealed that in 2008, Facebook tried to buy Twitter for $500 million in Facebook stock.
Facebook saw the potential in Twitter but the Twitter big-wigs declined. Mr. Stone told the FT that Twitter wanted to become not just a popular site but a viable business, and not be taken over by another company. “We’ve created something that people are finding value in,” he told the FT. “But we haven’t yet created a business out of this, and we really wanted to do that.”
It is possible that if Facebook had bought Twitter it would have died. As a part of Facebook, Twitter would have been restricted to only one set of users and is unlikely to have gone through its huge period of rapid growth. Its main financial power has been in business and less in social networking according to the FT.
Twitter had 175 million registered users as of November 1, 2010, who sent about 95 million messages a day or 25 billion “tweets” last year. Twitter has pursued rapid growth over profits, but since last spring, it has brought in advertising revenues through paid for “promoted tweets.” In mid-December, Twitter said it had received a major infusion of funds from a group of investors, which reportedly put a $3.7 billion value on the site.
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Well, a valuation of $3.7 billion or $500 million in Facebook vapor stock seems the Twitter boys did OK for themselves.
Is Twitter worth $3.7 billion? Does it have a business model to support $3.7 billion?
Is Facebook worth $50 billion?
Related articles
- Twitter Turned Down A $10 Billion Offer From Google – Report (GOOG) (businessinsider.com)
Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.