14 DAY TRIAL // Twitter isn't the superstar startup it was a couple of years ago, but there's still plenty of interest in the site and it keeps on adding users. No surprise then that there are companies interested in acquiring Twitter altogether.
The Wall Street Journal reports the not-so-surprising fact that both Google and Facebook have had a long-time interest in buying Twitter and low-level talks have been happening for months, though likely longer.
While the fact that Google and Facebook are interests in Twitter is not news, the price they're willing to pay is interesting, the WSJ says that the two companies are willing to pay as much as $8 billion to $10 billion for the 'information network.'
That's not a small sum, but Twitter is a household name around the world so it doesn't seem like much of an over-evaluation. However, based on the financial aspects, it's quite a lofty valuation.
Twitter is estimated to have made about $45 million in revenue, mostly from advertising, in 2010. That's a huge increase over the previous year, but it's hardly impressive.
What's more, the WSJ is saying that the company hasn't been profitable last year, due to big spending expanding its data centers and hiring a lot more people. Twitter added 250 employees in 2010 and it started the year with just 100 in total.
Estimates put Twitter's revenue for 2011 at $150 million, though WSJ's sources are more conservative pegging it at $100 million to $110 million.
Yet Google and Facebook are willing to pay as much as 200 times the revenue for the company. But at a time when Facebook is valued at $50 billion, despite a revenue of about $2 billion in 2010, perhaps it's not that surprising.
Not that Twitter is having any of it, it has expressed its desire to stay independent for quite some time now. And, apparently, it has no plans to sell to either Facebook or Google at this point either.