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