Why Is a Saudi Prince Buying a $300 Million Chunk of Twitter?

Kingdom Holdings Company, the investment vehicle of Saudi Prince Al-waleed bin Talal, has announced that it has pumped $300 million into Twitter as a “strategic” investment.

KHC has its hands in a lot of pies. It’s the largest shareholder of Citigroup, and it owns chunks of Apple, GM and News Corp (KHC owns 7% of its Class B shares). It’s also in the process of building Kingdom Tower, which will become the tallest building in the world once construction is complete.

But Twitter is the Prince’s first major push into owning the chunk of social media pie. Why is he so interested in Twitter?

The answer, I believe, is that the Prince knows that Twitter is the future of media, and he wants to make sure he has some influence in its development.

“We believe that social media will fundamentally change the media industry landscape in the coming years,” KHC Executive Director Eng. Ahmed Halawani said in the announcement. “Twitter will capture and monetize this positive trend.”

There’s a trend here: he’s not only invested in News Corp, but also Disney, Time Warner and now Twitter. He also owns a range of Arab media properties through KHC’s minority stake in the Saudi Research and Marketing Group.

One could speculate that the Twitter investment is related to the wave of revolutions that have swept the Middle East in 2011. Prince Al-waleed bin Talal is not an immediate successor to King Abdullah’s throne, but a revolution would certainly not be in his best interests.

Regardless, I believe the Prince wants to have a seat at the table when it comes to the world’s most powerful and influential media organizations. The Prince understands the influence of media and can see that Twitter is the future of media.

There aren’t a lot of downsides to owning a piece of that future. I bet the Prince offered terms that Twitter couldn’t turn down.

Image courtesy of CharlieRose.com