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‘People Familiar’ With a Bajillion Exaggerations Bloat Valuations by the Billions

A Wall Street Journal story addressing, ironically enough, tech industry hyperbole, starts with the statement that certain people “familiar with the matter” have said Twitter has had low-level acquisition talks with executives at both Facebook and Google. Then it shuts the door on that notion by stating the talks have gone nowhere. The click-bait-y “Twitter In Acquisition Talks” headlines poured in nevertheless.

The story later quotes one of those same “people familiar” saying that Google and Facebook have “latent interest” in Twitter. Anybody who witnessed the Buzz fiasco could have told you that the thought of acquiring Twitter might have crossed Google’s mind. But that probably wouldn’t make for a very sensational headline.

In the immortal words of Jerry Seinfeld, “Who are these people?”

Again, in the Journal story those familiar sources point out that executives at Twitter think they can make the company worth more than Groupon and Facebook combined. According to the story, “People familiar with the situation said the company believes it can grow into a $100 billion company.”

That really got tongues wagging.

The headline on the Wall Street Journal story is cautionary: “Twitter as Tech Bubble Barometer.” The headline on the Silicon Alley Insider pick-up of the story is ecstatic: “Twitter Is Having Acquisition Talks With Facebook And Google And Thinks It Can Become A $100 Billion Company.”

At first blush one could be forgiven for thinking that the headline writers at The Onion had hijacked Business Insider for the day. Of course, current estimates of Twitter’s valuation come in at about $10 billion.

Executives have been known to spout of a tall tale or two when rallying the troops, so someone at Twitter might very have once said something as ridiculous as that, but does that open us up for a serious debate about the day when the company might be worth $100 billion? Of course not.

There is serious debate about whether or not a company that lost money on $5 million in revenue is a good deal for Google (and to a lesser degree, Facebook) at $8 or $10 billion. A private investor recently bought $80 million in Twitter stock on the secondary market for an undisclosed stake in the company, so that figure may or may not be sound. And Business Insider, which has in the past made repeated and cogent cases for why Google needs to buy Twitter, takes the opportunity to again plead to Google to drop coin on Twitter. Well, it does so once it can get past the breathless $100 billion figure.

In December, Twitter closed a $200 million round of funding led by venture capital titan Kleiner Perkins Caufield & Byers, which bumped the valuation up to $3.7 billion.

Perhaps that was when some Twitter exec, drunk at a bar in the Mission after too much celebrating, blurted out that the company would one day the company would be worth $100 billion. And maybe he went on to say that he’d already had acquisition talks with Facebook and Google. Maybe he went on to say that Twitter was going to buy Google and not the other way around.

And there you have the most likely suspects for “people familiar with the matter.” San Francisco bartenders.

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