Social networking and other growing tech firms
are in the crosshairs for investors and for acquisitions from later entities.
One of the firms that huge companies like Google and Facebook are eyeing
greedily is Twitter. Both Google and Facebook have reportedly approached Twitter
for a possible purchase.
So far, The Wall Street Journal sources
say that Twitter has turned
down any purchase offers and the numbers being tossed around for the
140-character messaging site are in the area of $8 billion to $10 billion. None
of the parties allegedly involved in the talks will comment publically about a
potential takeover or talks that may have been had.
The huge sum of money that is being tossed around for
Twitter has some wondering if the company is worth it. According to the sources
at the WSJ, Twitter generated revenue of about $45 million in 2010 and actually
lost money after spending on new workers and data center improvements.
Estimated revenue is thought to be in the $100 million range for 2011.
Ethan Kurzweil from Bessemer Venture Partners
said, "Are these prices justifiable based on financial multiples?
No." However, Kurzweil thinks the real money that Twitter is worth comes
from the value of the data the service has collected on its users. Twitter
started placing ads on its content about a year ago and was valued at about
$3.7 billion in December 2010 when it received a $200 million investment from
Turning down big money offers for acquisition is
becoming more common with startups in the tech world as they seek to stay
independent and build up rather than sell early for quick profit. The WSJ
reports that other tech firms are looking to go public with Pandora Media
planning a $100 million IPO this year and LinkedIn Corp filing to go public
with valuations in the area of $2 billion. The WSJ reports that venture capital firm Andreessen Horowitz announced
Wednesday that it had purchased $80 million in Twitter shares through exchanges
for private-company stock. The firm will not say what percentage of Twitter
stock that it owns.