Saudi Prince Alwaleed bin Talal, one of the richest men in the world and a prominent shareholder in several major Western corporations, has purchased a $300 million stake in Twitter, the increasingly influential microblogging service. Prince Alwaleed, through his investment company Kingdom Holding, now holds a 3% position in Twitter, which is valued at roughly $10 billion.
The Western-educated Alwaleed, occasionally referred to as the Warren Buffett of the Middle East, is a major investor in other U.S. companies, particularly in the media, technology and financial sectors. He is the second largest shareholder after the Murdoch family in Fox News-owner News Corp., and also owns substantial stakes in Time Warner, Citigroup, General Motors and Apple. Alwaleed didn’t invest directly in Twitter, but rather purchased shares from existing investors, according to Fortune.
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“We believe that social media will fundamentally change the media industry landscape in the coming years,” Ahmed Halawani, Kingdon Holding’s Executive Director of Private Equity and International Investments, said in a statement. “Twitter will capture and monetize this positive trend.”
Twitter, which has more than 100 million users worldwide, has been pursuing a strategy of growth before revenues. The company has been wary of pushing conspicuous advertising onto its service, lest it alienate its users, who have grown accustomed to a largely ad-free experience. Prince Alwaleed’s investment comes after Russian billionaire Yuri Milner earlier this year led an $800 million investment through his firm DST Global.
Given Twitter’s role in the Arab Spring uprisings, Prince Alwaleed’s investment is sure to generate some controversy. Activists throughout the region have used the service to rally support and communicate with the outside world. Saudi Arabia remains one of the most closed and repressive societies in the world, and the Saudi royal family, of which Prince Alwaleed is a member, rules the oil-rich country with an iron first. The chances of a popular uprising toppling the regime there are highly unlikely.
Already, some observers are viewing the investment cynically. Evgeny Morozov, a visiting scholar of Stanford and the author of The Net Delusion: The Dark Side of Internet Freedom, suggested that the investment is designed “to preempt a ‘Twitter Revolution.’” But as BoingBoing’s Rob Beschizza points out, the Saudis don’t need to control Twitter to silence it. The kingdom already has one of the most tightly controlled Internet networks in the world, and can block websites at will any time it chooses. Rather, Prince Alwaleed has been an aggressive and forward-looking investor in Western media companies, and his new stake in Twitter is consistent with that.
On the other hand, should a Twitter-fueled popular uprising ever take hold in Saudi Arabia, Twitter’s top executives may find themselves in an uncomfortable position. After all, they have a duty to act in the best interests of their shareholders, including, now, Prince Alwaleed. But those interests may not dovetail with the interests of Twitter’s users, to put it mildly.