Could Twitter Be Worth $100 Billion To Google? Analysts Weigh In

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Twitter IncTWTR
is still rumored to be up for sale, and
Google IncGOOG
is still rumored to be the company most interested in a merger.
Social media chatter
suggests that Twitter could be worth up to $100 billion to Google. That might end up being nothing more than the opinions of some investors, but Benzinga reached out to several analysts to get their take on the matter. "Let's address the $100 billion: I'm on record saying I do think Twitter [can get there]," Twitter expert Sean Udall (
@UdallTechStrat
) told Benzinga. "As a standalone entity, assuming things work fairly well…[and] I don't think things have to work fabulously for Twitter. I just think they need to have relatively solid growth for another five years or more and you have $100 billion company." MKM Partners analyst Rob Sanderson also feels that Twitter could one day be worth $100 billion as a standalone entity. "If Twitter is able to, if by their service delivery, grow into their potential and become a mass-market service, one day could be worth $100 billion," Sanderson told Benzinga.

Related Link: Will Facebook And Twitter Takeover Google's Ad Business?

Purchase Price

Tech industry expert and analyst
Jeff Kagan
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doesn't know how much Twitter could be worth to Google. "Twitter may not be performing at its top level right now, but Twitter is still a very powerful company with a very powerful brand name and a very powerful growth-oriented position," Kagan told Benzinga. "It wouldn't take much for Twitter to accelerate quickly. It would just take one hot idea followed by another hot idea. One idea is enough to start it. Google has money to burn, so Google can overpay if they see value." Niles Lawrence, president of stock analysis site
Vuru
, told Benzinga that he doesn't think Twitter would be worth anywhere near $100 billion to Google right now. Udall said there is "no way" Google would pay $100 billion "because you don't have to pay $100 billion to get a deal done." "Google might pay $40 billion because they want to monetize Twitter to where it will be worth $100 billion or more," said Udall. "A company is not going to make a huge stake and do a big investment if they think it has not only 2X or 3X upside, but maybe 4, 5 or 6X upside. My best guess right now, if a deal were to occur, probably $40 billion on the top end. I think that equates to about $58 a share." Global Equities Research analyst Trip Chowdhry does not believe Google would be interested in paying $20+ billion for any company right now. He said another firm might be interested in acquiring Twitter but at a much lower price.

Long Road Ahead

Sanderson would not comment on whether a Google-Twitter merger is likely to happen, but he said Twitter could lag without a credible offer. "Over the next couple of quarters, we don't see really any enthusiasm or buying support for the stock unless there's credible speculation of a Google takeout," said Sanderson. Kagan said that Twitter's IPO has made him realize the importance of the public market. "If Twitter was a private company, it wouldn't have to grow quarter after quarter," said Kagan. "It wouldn't have to continue to do the things investors demand -- it would just be happy with the size it was." As a private company, Kagan said Twitter would be fine, but as a public company it has to keep growing. Disclosure:
At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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Posted In: Analyst ColorAnalyst RatingsTechGoogleJeff KaganNiles LawrenceRob SandersonSean UdallTrip Chowdhrytwitter
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