Facebook and Google have held “low-level” takeover talks with Twitter putting a price tag of $8 billion and $10 billion on the social media service, according to an article in The Wall Street Journal.
While the talks have “so far gone nowhere,” the article reports insiders are surprised by the valuation since Twitter lost money in 2010 on revenues of just $45 million. Revenue estimates for 2011 are between $100 and $110 million.
“Are these prices justifiable based on financial multiples? No,” Ethan Kurzweil of venture capital firm Bessemer Venture Partners, told WSJ. But the market is very robust for start-ups building social services with lots of data about their users, he said.
Twitter, Google and Facebook all declined to speak to the WSJ.
In December, a venture capital investment of about $200 million valued Twitter at $3.7 billion, but since then Facebook’s latest valuation of $50 billion and Groupon’s decision to turn down a $6 billion takeover suggest the market for social media companies remains very hot.
Citing a person “familiar with the matter,” the WSJ reports Twitter has been selling out its Promoted Trends inventory, while Promoted Tweets and Promoted Accounts are also selling well.
“People familiar with the situation said the company believes it can grow into a $100 billion company,” reports the WSJ.
