JPMorgan in talks to buy 10% of Twitter

A JPMORGAN fund is in talks to acquire a substantial stake inTwitter, one of the fastest-growing social networking sites.

The fund hopes to acquire 10 per cent of the online messagingservice for $450 million ([euro]327 million), valuing Twitter at$4.5 billion, according to people familiar with the plans.

It is not clear if the JPMorgan fund will make a directinvestment or buy out existing investors and shareholders withTwitter's approval. But the fund does not intend to buy shares onthe secondary market, the people said. The deal has not closed.

JPMorgan's Digital Growth Fund was established this month to giverich clients exposure to fast-growing private tech companies, andfollows a similar effort by Goldman Sachs to invest in Facebook.

The fund has raised $1.22 billion to date, according to a filingwith the Securities and Exchange Commission. But it plans to raise$1.3 billion in total, and will have a maximum of 480 investors.,JPMorgan expects to earn commission of at least $13 million from thefund.

Besides the Twitter stake, JPMorgan hopes to invest another thirdof the fund in one other private web company - possibly games makerZynga or telephony provider Skype.

The final third of the fund will be allocated among six othercompanies, they said - possibly to include coupons siteLivingSocial, or Gilt, the flash-sales site. Twitter will be thefund's focus. The company has 253 million unique users per month, up85 per cent from a year ago.

Internet market research firm eMarketer expects revenues to reach$150 million this year.

Kleiner Perkins invested $200 million in Twitter in December at a$3.7 billion valuation. The JPMorgan valuation of $4.5 billion wouldmark a swift rise in value, and could aggravate concerns of a newtech bubble. - (The Financial Times Limited)