The market was agog at reports the other week that Saudi Prince Alwaleed Bin Talal has invested $300 million in Twitter, via his Kingdom Holding investment group. Even more significant given that Twitter was used by protesters in this year's Arab Spring revolts which threatened Saudi Arabia until the kingdom unveiled a populist $US130 billion social spending package.
But does it add up?
Fortune reports that deal is structured in a way that Alwaleed purchased shares from existing Twitter insiders. This means that Twitter would have been required to approve of the transaction. At the same time, it will not actually receive any of the $300 million. This is not a traditional investment. "Twitter has raised over $750 million in direct venture capital, from firms like Spark Capital, Union Square Ventures, Kleiner Perkins, Benchmark Capital, Institutional Venture Partners, T. Rowe Price and DST Group. It is unclear which of these firms – or other company insiders, such as current or past employees – sold shares to Prince Alwaleed."
Twitter is still trying to work out how to monetize its services. According to a report in eMarketer, global ad revenues at Twitter were expected to grow 210% to $139.5 million in 2011, up from just $45 million in 2010, and would reach $400 million by 2013.
no comment untill now