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Current DateTime: 11:17:36 12 Nov 2009
LinksList Documentid: 31765984
Expiration DateTime: 11/12/2009 11:18:04 AM
    • News Corp. vs Google  10 Nov 2009

        CNBC's Julia Boorstin has the details on Rupert Murdoch's new search engine, with Rich Harlgaard, Forbes publisher.

    • Murdoch's Content Conundrum  10 Nov 2009

        Fox's Rupert Murdoch is vowing to protect his online content at all costs, with CNBC's Julia Boorstin and Jim VandeHei, Politico executive editor.

    • Murdoch Snubs Google  10 Nov 2009

        Rupert Murdoch is threatening to yank his content from Google, calling the engine a "content kleptomaniac" and a "parasite" for stealing content from his company's newspapers. Quentin Hardy, of Forbes, and CNBC's Julia Boorstin discuss.

    • "Call of Duty" Debuts With a Bang  10 Nov 2009

        The debut of video game "Call of Duty" could be the biggest debut of any entertainment product ever, reports CNBC's Julia Boorstin. Edward Williams, leisure analyst at BMO Capital Markets, shares his insight.

    • Money-Making Gaming  09 Nov 2009

        The most highly anticipated video game of the year will be released at midnight, with CNBC's Julia Boorstin; Tony Gikas, Piper Jaffray video game analyst; and Lewis Ward, IDC Research Manager.

    • Video Game Assault on Movies  09 Nov 2009

        Call of Duty, Activision Blizzard's latest video game, is already breaking pre-sale records. Matthew Jacob, of Majestic, and CNBC's Julia Boorstin discuss.

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Current DateTime: 11:17:36 12 Nov 2009
LinksList Documentid: 31625651

Media Money

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Nov.26
9:37 AM ET
Wednesday, 26 Nov 2008
What's Facebook Got? And What Is Twitter Worth?
Posted By:Julia Boorstin
Sectors:Technology | Media
Companies:Microsoft Corp

CNBC.com

It was only about a year ago that Microsoft [MSFT  Loading...      ()   ]  invested in Facebook, paying $240 million for an equity stake in the company that put Facebook's valuation at $15 billion. So the big question now is, if Facebook wants to use its stock to buy another company, what's it really worth?

Facebook has been in talks with Twitter, a private micro-blogging start-up (it allows you to easily update your contacts with messages or "tweets" of up to 140 characters). Negotiations put Twitter's value at as much as $500 million. Whether or not this deal goes through, which is looking unlikely at this point, these talks speak volumes about both Twitter and Facebook.

Twitter is the "it girl" startup in the world of social networking. Twitter's not making money and there's no clear profit model, though some other startups like Twitterise and Twittad design marketing tools with real revenue streams around Twitter's service. Twitter's co-founder, Biz Stone, has indicated that the company wants to remain independent to build its on its business model and grow its user base. But even so, can a company with a great idea that hasn't hit a tipping point in terms of users snag $500 million in this market?

Now Facebook was planning to use $500 million in stock, but is that stock based on its $15 billion valuation? The deal could have put both Facebook and Twitter's value much lower, but this deal does put Facebook's value in the spotlight. Twitter seems like a natural fit for Facebook-- it's effectively a status update system, and combining with Facebook would instantly make Twitter a huge hit, though Twitter's early adopters probably wouldn't be too thrilled.

According to the Silicon Valley blogosphere Facebook offered up to $100 million in cash for Twitter, but apparently that wasn't enough. Does Facebook care that Twitter doesn't have a significant revenue stream? Facebook is itself just starting to get its revenue going, and has a lot of work to do before revenues catch up with users. I'm not surprised talks broke off. Both companies are hard at work building out their models.

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