The world is a-twitter with talks: social networking site Twitter may be up for sale, to be bought by either Google or Facebook. Facebook and Twitter could become one and the same -- at least in terms of ownership.
Two of the world’s most famous companies are said to be bidding for at least $10 billion in Twitter action – entering first talks with the social networking site about a possible purchase. Both Facebook and Google are said to be vying for Twitter and entering in initial talks about possible purchase of the site.
Twitter’s rumored to be asking $10 billion for the site but there’s no confirmation on exact numbers – in what many suspect could, in fact, be a far higher figure for buy-out. The social networking site was only valued at $3.7 billion in December 2010.
Google's been buying recently: the search engine giant's already spent hundreds of millions in purchases, since the beginning of this year. Coupon company Groupon recently turned down a Google offer, to buy the company for a $6 billion offer -- the offer's decline made at the end of November 2010. Google had upped its offer, for the two-year-old Groupon company, from between $3 to 4 billion dollars.
While the $6 billion dollar figure may seem high, the difference with Groupon is that the company is actually profitable – with most recent annual revenues estimated at about $500 million. The online coupon company has doubled the markets it serves since just May of 2010, had a valuation of about $1.3 billion nearly one year ago, and has raised $170 million from investors. One of Groupon’s investors: Facebook.
$10 billion from Facebook or Google may be a lowball price for the Twitter web site – the Wall Street Journal claims the social networking site could be worth $100 billion with growth. On the flipside, however, Twitter is lacking what could be the only key to its growth and future profitability: advertising.
While Twitter claims a 200-million user base, twitter.com has maintained a constant battle with bringing in or instituting ad revenues -- ironically, a very similar problem for Facebook. Speculation says Twitter may top $150 million in advertising revenue for 2011 – triple its previous numbers – but the amount is still chump change for the web site’s reach and user base. Even with speculation that Twitter jumps that ad revenue to $250 million in 2012, the company’s business model doesn’t necessarily allow for sustainability. While Twitter claims hundreds of millions of registered users, including automated feeds and spam bots, a constant stream of newly-joined Twitter members serves as the reminder that many just don’t get the point of the web site.
Twitter may want to get out while the going is good – the question is when and where.
While Google probably remains the biggest contender in a Twitter purchase, many are alarmed by the idea that Facebook and Twitter could suddenly be one and the same – at least in terms of ownership, translating to future policies and management.