Square denies it discussed sale to Google

Square denies it discussed sale to Google

Speculation about the future of Square is growing after the mobile payments startup was forced to pour cold water on a Wall Street Journal report claiming that, facing growing losses and a shrinking cash pile, it has been in talks about a possible sale to Google.

Citing three people "familiar with the matter", the WSJ says that Google discussed a possible Square acquisition earlier this year, although it is not known whether the talks are still in progress.

Informal talks have also taken place with Apple and PayPal about a possible multi-billion dollar sale, says the report, but failed to progress.

Despite revenues of $550 million, Square posted a loss of around $100 million in 2013. Jack Dorsey's firm has already burned through more than half of the $340 million it has raised since 2009, says the Journal. This month it secured a line of credit of up to $200 million.

The company is thought to be struggling with the thin margins on the 2.75% fees it charges merchants. Its much-hyped deal with Starbucks has so far failed to reap rewards, actually costing Square at least $20 million last year, according to the WSJ's sources.

Square corporate communications chief Aaron Zamost took to Twitter to deny the Google claims:

Adding: "We are not, nor have we ever been in acquisition talks with Google and while we appreciate that Square may be an attractive target we have never seriously considered selling to anyone or been in any talks to do so."

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 April, 2014, 13:19Be the first to give this comment the thumbs up 0 likes

SQUARE essentially delivers risk-free interchange revenues to banks and doesn't disintermediate them, as is commonly hyped. I was assuming that, in the process of doing so, it was earning enough money for itself. I now realize how mistaken my assumption is. On another note, banks have been making money hand over fist for 40-50 years in this business. It's amazing how wannnable disrupters enter it and bleed so badly. But, credit where credit's due, they've mastered the art of getting acquired for billions without much to show by way of revenues or profits.