Twit­ter’s Fi­nanc­ing Round to value com­pany at more than $3 bil­lion

The Pak Banker - - Company& -

NEW YORK: Twit­ter Inc. is con­sid­er­ing a fund­ing round that would value the com­pany at more than $3 bil­lion as in­vestors clamor for a stake in the so­cial-net­work­ing ser­vice, ac­cord­ing to three peo­ple fa­mil­iar with the mat­ter.

The fi­nanc­ing may in­clude new in­vestors, such as ven­ture-cap­i­tal firm Kleiner Perkins Cau­field & Byers and Rus­sian in­vest­ment com­pany Dig­i­tal Sky Tech­nolo­gies, said two of the peo­ple, who de­clined to be named be­cause the fundrais­ing isn't pub­lic. Sean Gar­rett, a Twit­ter spokesman, de­clined to com­ment.

Fresh fund­ing would help Twit­ter broaden its ser­vice and at­tract more users, now num­ber­ing more than 175 mil­lion, while less­en­ing pres­sure to do an ini­tial pub­lic of­fer­ing. In Oc­to­ber, Twit­ter named op­er­a­tions head Dick Cos­tolo as chief ex­ec­u­tive of­fi­cer, af­ter he helped the com­pany start an ad­ver­tis­ing pro­gram that at­tracted com­pa­nies such as Star­bucks Corp. He re­placed co-founder Evan Wil­liams.

Started in 2006, San Fran­cisco-based Twit­ter raised $100 mil­lion in Septem­ber 2009, when it had about 25 mil­lion users. That round in­cluded T. Rowe Price Group Inc., In­sight Ven­ture Part­ners, Spark Cap­i­tal and In­sti­tu­tional Ven­ture Part­ners. The val­u­a­tion was about $1 bil­lion, a per­son fa­mil­iar with the mat­ter said at the time. In Jan­uary, Cos­tolo said that an IPO is still "way out" for Twit­ter.

The ser­vice, em­braced by ac­tors, politi­cians, ath­letes and com­pany ex­ec­u­tives, lets users broad­cast mes­sages of no more than 140 char­ac­ters. In Septem­ber, Twit­ter re­vamped its web­site to make it eas­ier to post pho­tos, video and maps di­rectly on the page. The redesign also gives mar­keters a new way to use multimedia in on­line pro­mo­tions. The com­pany needs cash to ex­pand its work­force and build data cen­ters to han­dle in­creas­ing traf­fic. Twit­ter said in July it was open­ing its own man­aged data cen­ter in Utah and that it planned to add sim­i­lar data cen­ters in the next 24 months. Twit­ter ranks third glob­ally among so­cial-net­work­ing sites, top­ping News Corp.'s MyS­pace, ac­cord­ing to ComS­core Inc. in Re­ston, Vir­ginia. Face­book Inc. is No. 1, and Win­dows Live Pro­file from Mi­crosoft Corp. is sec­ond. Twit­ter's fundrais­ing ef­forts were pre­vi­ously re­ported by the TechCrunch and Al­lThingsDig­i­tal blogs.

More­over, Com­cast Corp., bid­ding to gain con­trol of NBC Uni­ver­sal Inc., ex­tended its agree­ment for the trans­ac­tion with NBC par­ent Gen­eral Elec­tric Co. by 90 days as the com­pa­nies await reg­u­la­tory ap­proval.

The "mas­ter agree­ment" was ex­tended to March 3 from Dec. 3, Com­cast said in a reg­u­la­tory fil­ing to­day. The orig­i­nal deal, struck a year ago, in­cluded the op­tion of two 90-day ex­ten­sions.

Com­cast, the largest U.S. cable-tele­vi­sion com­pany, is ac­quir­ing a 51 per­cent stake in NBC Uni­ver­sal from GE by pay­ing $6.5 bil­lion in cash and con­tribut­ing cable chan­nels worth $7.25 bil­lion to a joint ven­ture that will own the en­ter­tain­ment com­pany. Com­cast, based in Philadel­phia, is "still fo­cused on work­ing with the agen­cies to re­ceive reg­u­la­tory ap­proval by year end," Sena Fitz­mau­rice, a Com­cast spokes­woman, said in an e-mail to­day.

Com­cast fell 1 cent to $20.71 at 4 p.m. New York time in Nas­daq Stock Mar­ket trad­ing. The shares have risen 23 per­cent this year. GE, based in Fair­field, Con­necti­cut, rose 10 cents to $16.78 in New York Stock Ex­change com­pos­ite trad­ing. -

More­over, Twit­ter is mulling a new round of fund­ing that would value the com­pany at over $3 bil­lion, ac­cord­ing to a Bloomberg re­port. "The fi­nanc­ing may in­clude new in­vestors, such as ven­ture cap­i­tal firm Kleiner Perkins Cau­field & Byers and Rus­sian in­vest­ment com­pany Dig­i­tal Sky Tech­nolo­gies, said two of the peo­ple, who de­clined to be named be­cause the fundrais­ing isn't pub­lic," the news ser­vice re­ports. These firms are sea­soned ven­ture cap­i­tal­ist op­er­a­tions, so it is likely they be­lieve the val­u­a­tion is rea­son­able.

The news of the po­ten­tial fi­nanc­ing comes just as Google (GOOG) is in ne­go­ti­a­tions to buy on­line re­tail dis­count coupon ser­vice Groupon for as much as $6 bil­lion. Other large Web 2.0 com­pa­nies have also been given lofty val­u­a­tions. Face­book has a val­u­a­tion of be­tween $12 bil­lion and $14 bil­lion. The world's largest so­cial net­work has over 500 mil­lion mem­bers. Twit­ter has over 100 mil­lion.

In a sep­a­rate news items, U.S. in­vest­ment fund Kleiner Perkins Cau­field & Byers is in­ter­ested in ac­quir­ing eq­uity in Twit­ter. Po­ten­tial buy­ers have val­ued the Twit­ter at $ 4 bil­lion, re­ports TechCrunch. Ven­ture cap­i­tal­ist has ex­ceeded the pro­posal made by its near­est con­tender - a Rus­sian in­ter­net in­vest­ment fund Dig­i­tal Sky Tech­nolo­gies Global (DST Global). Two weeks ago, the Rus­sian Fund had es­ti­mated Twit­ter at $ 3.4 bil­lion, ac­cord­ing to un­of­fi­cial in­for­ma­tion, the com­pe­ti­tion be­tween these two main con­tenders for a stake in Twit­ter started in early Novem­ber, when man­age­ment of Twit­ter an­nounced its plans to raise fund to the scale of $ 200 mil­lion. -PB News

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