JP Morgan in Twitter talks

28th February 2011

The talks come as JP Morgan has so far raised $1.22bn for a new Digital Growth Fund, launched to give the bank's clients access to new media and private technology companies. The fund's target size is $1.3bn.

Rumours are rife that the fund could also invest in games maker Zynga or internet-phone service Skype.

Twitter has enjoyed explosive growth since it was launched in 2006. According to venture capital group Kleiner Perkins Caufield & Byers, the website has 253m unique users each month, 85% higher than the number who visited this time last year.

The JP Morgan investment would raise Twitter's valuation by a further $800m – or 21.7% – raising further questions over whether a new technology bubble is being created.

The Telegraph readers are not convinced: springmellon writes: "Twitter has never made a profit and for most of its existence, did not even have any revenue. From what I can gather it has struggled to even find a model to make a profit, and revenue from advertising for the last six months of 2010 was only approximately £30 million. I assume the plan of JP Morgan is to inflate this bubble company in the hope of flogging it off to some fool before it goes belly up."

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