According to reports appearing in the Wall Street Journal, Facebook Inc. and Google Inc., among others have started preliminary takeover talks with Twitter that potentially values the internet company at £6 billion ($10 billion).
Twitter had raised $200 million in December in a deal that had put the value of the company at $3.7 billion. Twitter had 175 million users as of last September and the service allows users to broadcast messages of up to 140 characters to groups of followers.
Quoting sources familiar with the development, the WSJ said on its website that ‘low level’ talks have been held between the executives of Twitter and Google as well as Facebook for a possible acquisition of the company. Sources said there are other companies as well who held discussions for a possible buy-out.
“But what’s remarkable is the money that people familiar with the matter say frames the discussions with at least some potential suitors; an estimated valuation in the neighbourhood of $8 billion to $10 billion”, the WSJ report said.
No independent confirmation of the news could be obtained since Twitter, Google and Facebook refused to comment.
Despite the staggering valuation, the talks apparently remained inconclusive since the board and executives of Twitter want to build a large, independent company.
“People familiar with the situation said the company believes it can grow into a $100 billion company”, the report said.
Twitter is part of new breed of social networking sites such as Facebook, Linkedin and Zynga. Although Twitter was started in 2006, it allowed commercial advertisements on its site in the middle of 2010.
An independent internet research firm eMarketer had estimated last month that Twitter had generated revenues worth $45 million in 2010 and is expected to generate $150 million in 2011. The actual financials of the company is not available since its privately held.
eMarketer said that Google had generated revenues worth $29 billion in 2010 while Facebook managed revenues worth $1.9 billion.