When we first heard about the concept of Twitter about five years ago, we have to admit that we never thought it would take off. Reports today that Google and Facebook are once again seeking to purchase the Blue Bird company for up to $10 billion proves just how wrong we were.
Twitter has grown from humble beginnings to have currently having 175 million tweeters who produce 95 million tweets every single day. However, despite the number of dedicated Twitterers out there growing on a daily basis, the company is not really making any money as it attempts to keep up with the demand for micro-blogging site. This however has not prevented the company being valued at $3.7 billion only last December or – if reports in the Wall Street Journal are to be believed – internet giants Google and Facebook from trying to purchase it - again.
We've seen many rumours previously of attempts by Facebook, Google and even Apple to buy Twitter but nothing has come of them. According to the WSJ though, execs from both Facebook and Google, among other companies, have held low-level talks – we presume that doesn’t mean they were sitting on the ground – with Twitter in recent months to look into the possibility of an acquisition. According to people “familiar with the matter” these talks have so far been fruitless. These same people tell the WSJ that the money being talked about is in the region of $8 - $10 billion. That’s up to £6.2 billion for a company which had a revenue of just over £28million last year – most of which went up in smoke after investment in more data centres and personnel.
The prospect of being able to mine the advertising potential of 175 million active users is clearly driving the huge increase in valuation of Twitter, however the full potential of this is, as yet, unknown. The WSJ goes on to say that the Promoted Trends advertisement product which Twitter introduced last year has been selling out its inventory every day with Promoted Tweets and Promoted Accounts also doing “brisk business.”
Whatever the future for the micro-blogging site, it seems as if its valuation is unlikely to go down any time soon with numerous suitors combined with growing participation making it the hottest property on the internet at the moment.
Source: Wall Street Journal