The prince’s investment vehicle Kingdom Holding Company (KHC), said it believed social networking would change the media and Twitter could “capture and monetise this positive trend”.

Prince Alwaleed has an estimated personal fortune of $20 billion, making him one of the richest people in the world.

The prince – a nephew of Saudi Arabian King Abdullah – has investments in Apple, HP, eBay, Time Warner and the Walt Disney Company.

He is also the second largest investor in Rupert Murdoch’s empire, with a seven percent share in News Corporation.

Twitter, which is now valued at $8.4 billion, hasn’t commented on the purchase.

Social networking sites such as Twitter and Facebook played a major role in spreading information and organising protests in this year’s revolutions in the Arab world.

Arabic language tweets have risen sharply since the Arab Spring uprisings, and Arabic is now the eighth most used language on Twitter.

The San Francisco microblogging site has over 100 million registered users, posting around a billion tweets a week, but it still has yet to make a notable profit.