Big Two eye $10bn glitter of Twitter

Less than five years after Twitter's founders dared to believe that there was nothing important that couldn't be said with 140 characters or less, it is attracting takeover interest from the biggest companies on the internet, and the price being put on it is a thumping $10bn.

Nobody doubts that Twitter, on which its 200 million users share pithy distillations of their thoughts or links to their favourite web pages, has revolutionised communication on the internet, but the potential takeover price was raising eyebrows yesterday because not only is the company yet to turn a profit, it has not yet worked out a plan for doing so.

Reports in the financial press in the US claimed that Facebook and Google have held "low-level talks" about acquiring Twitter at a valuation of between $8bn and $10bn. For now, the company's bosses are intent on building Twitter into an independent giant, rather than selling out, so the talks have stalled, but other, unnamed suitors are also said to have started sniffing around.

Some of the savviest investors in Silicon Valley believe that Twitter's valuation is only going higher, and have been scrabbling to get their hands on shares, which are traded only on hard-to-access private markets. Two months ago, the company raised $200m to fund its development, in a fundraising round that valued it at $3.7bn.

And this week, the California venture capital firm Andreessen Horowitz, led by Netscape founder Marc Andreessen, who is on Facebook's board of directors, spent $80m buying Twitter shares at a valuation that observers said is sure to be considerably higher. The $8bn to $10bn valuation bandied about by potential acquirers suggests all these new investors are already sitting on big profits, at least on paper.

Facebook, the online network used by more than half a billion people around the world, and Google, the start-point for most people searching the internet, would be keen to wrap Twitter into their own companies, not least to stop the other from acquiring it. What Facebook, Google and Twitter have in common is that they offer ways for people to share and discover content on the Internet, and in a fast-evolving environment, no one can be sure what the future holds for any of them.

Twitter continues to soar in popularity. It has more than 200 million registered users, including one in eight people on the internet in the US, generating more than 70 million tweets a day. It has tripled the number of employees working on the business in the past year and now has some 350.

But it has only just begun to explore ways to make money. Advertisers can pay to have their 140-character tweets lifted to prominence, or to put their names on a list of popular topics, but the options are being kept deliberately limited by Twitter as the company gauges users' reaction to the intrusions. Twitter brought in $45m in revenue last year, and is expected to do a little more than double that in 2011.

Investors bought into Facebook last month, when it raised $1bn in a deal that valued it at $50bn. For many, the soaring value of these companies proves only one thing: Silicon Valley is in the grip of another bubble.

Start your day with The Independent, sign up for daily news emails
Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
News
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
news
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before