Only in the bubble of Twitter-obsessed San Francisco would a buyout offer of $2.5 billion seem “insulting.”
Yet that is reportedly how executives at the microblogging startup saw an informal offer from Google and a larger offer of $4 billion from another bidder earlier this year.
There remains a strong element of twee in Twitter, the San Francisco-based microblogging startup. Despite its increasing reach with 175 million users, it still cultivates the quirky spirit of cofounders Ev Williams and Biz Stone as it casts about for the kind of powerful revenue machine Google and Facebook have found.
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Business Insider, which reported the offers, rightly noted that it’s common for company executives to talk to each other and float around ideas. In the past, Facebook has fended off some 11 offers earlier in its day, including one from Yahoo for $1 billion.
Besides a belief that Twitter is worth more than the price offered — a view perhaps bolstered by the brisk private trade in Twitter’s shares on the secondary market — it’s understandable that cofounder Williams and current CEO Dick Costolo may hesitate at the thought of selling to Google. Both had previous ventures, Blogger and FeedBurner respectively, which were bought by Google and then neglected. It’s hard not to see the same happening even to a property as large as Twitter.
And the less said of the notion of a Microsoft-owned Twitter, the better.
The rejection of the offers, however informal, are a sign that the company is serious about its future, and isn’t going to show its cards this quickly. It could be gunning for an initial public offering, though its advertising products would have to gain far more traction for that to be possible. In the meantime, Twitter could easily raise more money at a valuation comparable to the buyout offers it’s getting.
Facebook previously made Twitter an all-stock offer of $500 million in 2008. Disagreement over the value of Facebook’s shares led to that deal falling apart, and misunderstandings between cofounder Jack Dorsey and Twitter’s board over that deal and other matters led to his ouster. (He is now the company’s chairman, a role which has grown more active and less titular since Williams stepped down as CEO and was replaced by Costolo.)
Apple also may have made an offer of $700 million, going as far in its due diligence as interviewing some key technical employees, last year, according to unconfirmed reports that were roundly dismissed at the time. Now that Apple has launched its own social network, Ping, and partnered with Twitter, though, those reports of Apple’s interest make far more sense.
Everyone wants in on Twitter’s precious tweets, it seems. And the price tag keeps rising.