Twitter seeks to buy TweetDeck for up to $50 million

SAN FRANCISCO Mon May 2, 2011 8:30pm EDT

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SAN FRANCISCO (Reuters) - Twitter has made an offer to acquire TweetDeck, a popular third-party software application for using Internet social networking services, for up to $50 million, according to a person with knowledge of the matter.

The cash and stock deal could close in less than ten days, the source said, and would represent one of five-year-old Twitter's largest acquisitions to date.

The deal would give Twitter an application that has won praise among sophisticated users for its slick interface and enhanced capabilities, while closing out a potential threat to Twitter's fast-growing service.

TweetDeck had been in acquisition discussions with UberMedia, a Pasadena Web company founded by entrepreneur Bill Gross, in a deal that was valued at less than what Twitter offered. UberMedia has been amassing a collection of Twitter applications which some commentators have speculated could ultimately be used to create a rival social network to Twitter.

The exclusivity terms of UberMedia's offer for TweetDeck expired in mid-April, allowing TweetDeck to respond to the Twitter offer, according to the source.

A Twitter spokesman said the company does not comment on rumors. TweetDeck and UberMedia did not immediately reply to requests for comment.

The deal comes a little over a month after Twitter co-founder Jack Dorsey returned to the company as executive chairman to oversee product development.

Twitter, which allows people to send 140-character text messages, or Tweets, to groups of so-called followers, is one of the Web's most popular social networking services, along with Facebook and Zynga.

The service has become a popular communications tool for celebrities, politicians and businesses, and has played a role in several geopolitical events, such as recent uprisings in the Middle East.

In December Twitter was valued at $3.7 billion in a $200 million funding round led by venture capital firm Kleiner Perkins Caufield & Byers. Subsequent auctions of Twitter shares on the secondary markets have suggested investors were valuing the shares at more than $7 billion.

Twitter's offer for TweetDeck is between $40 million and $50 million, according to the source, depending on how Twitter's shares are valued.

News of the Twitter deal for TweetDeck was first reported by the technology blog TechCrunch on Monday.

(Reporting by Alexei Oreskovic)

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