Saudi prince buys $300M stake in Twitter

DUBAI, United Arab Emirates -- Prince Alwaleed bin Talal, the Saudi billionaire and an investor in some of the world's top companies, has bought a stake in Twitter for $300 million, gaining another foothold in the global media industry.

Alwaleed, a nephew of Saudi King Abdullah and estimated by Forbes magazine this year to have a net worth of more than $19 billion, 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.

The investment was a secondary market transaction, meaning that Alwaleed and Kingdom Holding bought the Twitter shares from existing shareholders, rather than making a direct investment, according to a person familiar with the matter.

Twitter chief executive Dick Costolo acknowledged the company was valued at $8 billion in the secondary markets in October, according to media reports, which would peg Alwaleed's investment at just under 4 percent.

Kingdom executive director Ahmed Halawani told Reuters that "substantial capital gain" motivated the investment, adding that there were no moves to ask for a board seat or influence strategy at the microblogging site.

Twitter, which allows people to send 140-character messages to groups of followers, is one of the Internet's most popular social networking services.

"The Arab world, of course, knows full well the value of Twitter," said Bernhard Warner, co-founder of analysis and advisory firm Social Media Influence. "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."