Square discussing possible sale with Google, Apple -- report

Square, the mobile-payment startup started by Twitter co-founder Jack Dorsey, may sell itself to a much larger company, a new report claims.

Over the last several months, Square has been secretly holding meetings with major technology companies, including Google, Apple, and eBay's PayPal, to explore the possibility of a sale that could extend well into the billions of dollars, the Wall Street Journal is reporting, citing people who claim to have knowledge of the talks. For now, Square has had the deepest discussions with Google; its talks with Apple and PayPal were exploratory in nature, the report claims.

Square has been growing in leaps and bounds by attracting small merchants and collecting fees on each transaction. The company started out providing a card reader that attached to mobile devices, but has grown into a broader commerce firm, offering a digital cash-register service and the ability for users to send cash to friends and family. Square processes billions of dollars in transactions each year.

Despite its success, Square is having some money troubles, the Journal's sources say. Those people say that Square, a private company, lost $100 million in 2013, and has been burning through its cash. The issue, according to the Journal's sources, is that Square generates just 2.75 percent on all card transactions and then must pay out significant fees to card companies, leaving it with precious little to put into its own coffers. That apparently has left the company with a declining bank account.

For its part, Square has denied that it's trying to sell its business, but if that does happen, the company could fetch billions. The company is believed to be valued at over $5 billion, and it's possible that any potential suitor could offer a premium on that to woo its owners.

Exactly which company would actually jump to acquire Square, however, is unknown at this point. According to the Journal's sources, Google has shown the most interest, but the companies haven't held advanced talks.

In an e-mailed statement to CNET, Square threw cold water on the report, saying that it's not currently looking to sell its business.

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

CNET has contacted Google for comment on possible Square talks. We will update this story when we have more information.

Google shares are down 0.3 percent, or $1.67, to $534.43 in early trading on Monday.