Wall Street Journal Facebook and Google in 10bn bidding war for Twitter

first_imgThe incredibly successful microblogging service Twitter has been courted for buyout before, but that was in the nascent days when it wasn’t clear that the service wasn’t just the next web 2.0 flash-in-the-pan, soon to fizzle out.A few years in, Twitter’s almost as much of a social phenomena as Facebook or Google, and so it’s no surprise that both of those tech giants are now in talks to snatch Twitter up.What’s more surprising might be the vast amounts being discussed, with Facebook and Google allegedly in a bidding war for the service that has seen bandied-about figures hit $10 billion and more.That amount is just jaw dropping. Consider the fact that last year’s estimated revenue for Twitter was just $45 million. How’d the $10 billion number come about, then?“Are these prices justifiable based on financial multiples? No,” said Ethan Kurzweil of venture capital firm Bessemer Venture Partners. “But these start-ups are building social services and have lots of data about their users and the market is valuing that mightily right now.”Even so, the $10 billion price tag is far in excess of current street wisdom when it comes to Twitter’s actual value: just two months ago, Twitter was only valued at $3.7 billion when they applied for a new round of venture capital.Google and Facebook both have deep pockets, and it’s likely the increasing rivalry between the two parties that has really pushed the price tag so high. Even though Twitter fits in better with Facebook’s core services, Google would likely be better at monetizing the service unintrusively… and are certainly more trustworthy in many users’ eyes when it comes to privacy. At the end of the day, it would be nice if history repeated itself here, as Twitter co-founder Evan Williams and current chief executive Dick Costolo have both previously sold companies to Google.Read more at Wall Street Journallast_img read more