* Prince Alwaleed already owns stakes in Citi, News Corp
* Twitter buy is latest media venture
By Sitaraman Shankar
DUBAI, Dec 19 Prince Alwaleed bin Talal,
the Saudi billionaire and an investor in some of the world's top
companies, has bought a stake in microblogging site Twitter for
$300 million, gaining another foothold in the global media
Alwaleed, a nephew of Saudi Arabia's king who was estimated
by Forbes magazine this year to have a fortune of over $19
billion, already owns a 7 percent stake in News Corp
and plans to start a cable news channel.
Twitter was a key means of communication for protesters in
the Arab Spring revolts this year, violence that threatened
Saudi Arabia until the kingdom unveiled a populist $130 billion
social spending package.
The Twitter stake, bought jointly by Alwaleed and his
Kingdom Holding Co investment firm, resulted from
"months of negotiations", Kingdom said.
Twitter chief executive Dick Costolo valued the company at
$8 billion in October, according to media reports, which would
peg the size of Alwaleed's investment at just under 4 percent.
Kingdom's executive director Ahmed Halawani told
Reuters that "substantial capital gain" was the motivation
behind the investment, adding that there were no moves to ask
for a board seat or influence strategy at Twitter.
Twitter, which allows people to send 140-character messages,
or Tweets, to groups of followers, is one of the Internet's most
popular social networking services, along with Facebook and
Bernhard Warner, co-founder of analysis and advisory firm
Social Media Influence, said: "The Arab world, of course, knows
full well the value of Twitter. In the past year, it has been a
force in politics, in regime change, so there is not a single
person in that region in a position of influence who is not
following the increasing power of Twitter.
"(Alwaleed) must see Twitter as something that is going to
be a really powerful broadcast channel," he said, adding the
Saudi had got into the internet boom belatedly, with mixed
results, and appeared to be "kind of late" to the game again.
Investors in Saudi Arabia were more bullish, sending shares
in Kingdom up 5.7 percent to 8.30 riyals at the close.
"One of the few sectors to record significant revenue gains
in the last three years has been technology, which is why
Kingdom would see Twitter as a good addition to its diversified
portfolio," said Hesham Tuffaha, head of asset management at
Bakheet Investment Group in Riyadh.
Saudis are increasingly turning to satellite television,
online news providers and social networking to stay abreast of
world events. The world's biggest oil exporter announced a
series of stricter regulations for journalists earlier this
Alwaleed, 26th on the Forbes list of billionaires with a
sizeable stake in Citigroup, has spoken in favour of
broader political participation, fair elections and effective
job creation across the Arab world.
He has also been publicly supportive of management including
the Murdochs at News Corp and Citigroup chief executive Vikram
Several Arabs tweeted that they were worried Alwaleed's
purchase would influence strategy negatively at Twitter.
But Abdel-Khaleq Abdullah, an Emirati political scientist,
said the investment was unlikely to raise eyebrows in official
"He just saw an opportunity, a money-making opportunity,
nothing more, nothing less," he said. "(Internally), it's going
to be viewed as a shrewd investment and I don't think we should
read too much into it."
The prince's wife, Princess Ameerah al-Taweel, is a regular
Tweeter and has nearly 83,000 followers on the site.
INVESTOR BACKS IPO
Halawani gave his backing to a
potential initial public share
offering from Twitter , saying the investor
would be interested in participating.
Markets are eagerly anticipating a Twitter
float but the company said in September it was in no hurry to go
public. It raised $400 million in venture capital financing this
It now counts more than 100 million active users who log
onto the service at least once a month. Facebook, the world's
largest social network has more than 750 million active users.
Internet search giant Google recently launched a
social networking service dubbed Google+ which some observers
say could attract users away from Twitter.
Shares in online games developer Zynga ended at a 5 percent
discount to their issue price on their trading debut on Friday,
and analysts said any valuation for Twitter could be misleading.
"You could put any number of zeroes behind a valuation of a
private company. Before it goes public it is almost
meaningless," said Warner.
"This is a very small group of investors which has put money
into this thing. That will be diluted and diluted and diluted
again until it goes public. And that is when we will see what
the value is. These are kind of magic numbers at the moment."
Kingdom owns a near-30 percent stake in Saudi Research and
Marketing Group, which runs a range of media titles.
"Our investment in Twitter reaffirms our ability in
identifying suitable opportunities to invest in promising,
high-growth businesses with a global impact," Alwaleed said.
Alwaleed paid $500 million for shares in last year's General
Motors IPO. In August this year he unveiled plans to
build the world's tallest tower in Jeddah.