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From Ridicule To Dissident Tool, 5-Yr-Old Twitter Wooed By Giants

Happy Birthday Twitter! Who would have thought 5 years ago when Twitter was dismissed as a narcissistic forum for those who needed to report what they had for breakfast, that it would become not only a major communication tool for protesters, but that some day it would actually be wooed by Internet powerhouses, the likes of Facebook and Google?

According to both the Guardian and the Wall Street Journal, Twitter is valued somewhere between $8-10 billion. However, ending 2010 at $45 million in revenues suggests that Twitter incurred a loss for the year.

Brin, Page & ZuckerbergBrin, Page & ZuckerbergSo why are Zuckerberg, Page and Brin coveting the microblogging site? Well for one, its on track this year to make up for last year's with forecasted revenues that would double 2010's revenues - in the neighborhood of $100-110 million. Secondly, it has scaled well in the last fiver years. Not quite the size of Facebook's 600+ users, latest reports have Twitter at 175 million.

One of the new Twitter ad services, called Promoted Trends, has been selling out its inventory daily. The other two ad products, Promoted Tweets and Promoted Accounts, are also doing brisk business, according to all report.

This coupled with the Internet bubble that has investors large and small salivating, IPO fever seems to be inflatingGoldman Sachs & FacebookGoldman Sachs & Facebook valuations every where you turn. Facebook, itself recently raised $1.5 billion of financing that valued the social network between $50 and 60 billion. Goldman Sachs, FB's number one book runner actually had to pull back offers to top-tier clients in fear of breaching the SEC's financial regulations on private investments (see "Social Media Stock Markets Don't Need No Stinkin' IPOs" for more on social media private stocks).

While LinkedIn and Zynga both are planning IPOs in the next couple of months, there have also been a number of new media buy-outs. According to the Guardian report, the most notable is AOL acquiring the Huffington Post for $315 million, which was noted as being 10 times the media company's 2010 revenues.

The Wall Street Journal reported that both Facebook and Google have held "low-level talks" with the principals at Twitter. However, the "talks have so far gone nowhere." A Twitter spokesman declined to comment on its finances, valuations and interest by other companies. Google and Facebook also declined to comment.

So readers, do you see an acquisition in the works? I personally feel the media is over-reaching for a story here. Not to say that folks from Twitter, Facebook and Google don't talk to each other regarding such matters, I don't see any of these major players making a move just yet. Both Google and Facebook have discussed a bid for Twitter in the past. Facebook founder Mark Zuckerberg was believed to have offered Twitter's founders $500m in Facebook stock for the company in 2008, but the deal collapsed.

And with valuations having escalated exponentially in the last two years, there's too much at stake for any of these companies to make the wrong move - particularly the microblogging site. Happy Birthday Twitter - may your fifth birthday be one of many more to come!

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Ron Callari
Social Media Trends
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