Twitter Valued at $10 Billion

http://blogs.wsj.com/deals/2011/02/10/twitter-at-10-billion-insanity/

by DigitalBoB12 • 15 years ago

34 43 15 years ago

blogs.wsj.com

blhack7• 15 years ago

We all already know that this is absolutely insane.

That's $100 Million a year for the next hundred years.

zwadia2• 15 years ago

What makes you think Twitter will:

a) peak at around 200M users b) only manage to monetize $0.50 per user annually?

FB makes $4 per user. You think Twitter won't be able to manage atleast $2? They've barely capitalized on the analytics they perform thus far.

blhack7• 15 years ago

In my opinion, twitter vs facebook isn't a fair comparison at all.

Facebook is games, and photos, and chat, and events, and groups, and coca cola's official page. There are a lot of reasons to visit facebook.

Twitter is short status messages. Basically twitter is about half of what facebook was 5 years ago.

I think the 200 Million number is dishonest. I'm a twitter user, and have been for at least a couple of years...but I think I log into the site and look at it about once a week (here is my twitter: http://twitter.com/blhack). Most of those logins happen over my phone, meaning I don't see the "trending" ads...or any ads at all.

I said that I don't really use twitter. This wasn't always the case. I used to check it probably 10 times a day...but then a new service came along and replaced it for me. It does a better job at status updates...so I switched (and so did most of my friends). This is also a huge problem for twitter. What is twitter giving me that I can't get elsewhere (in my opinion: nothing...doubly so because the new layout is so hideous)

blhack7• 15 years ago

To whoever is downvoting this person (it was at -1): knock it off. This was a valid question that sparked a valid discussion about how to monetize twitter.

It's not spam, and the user doesn't deserve to be effectively punished for asking the question.

bretthopper• 15 years ago

I'm not defending the valuations of Twitter and Facebook (since I think they're too high), but I don't think it's useful to just look at their revenues for the previous year and extrapolate a multiple and call it ridiculous.

Both of those companies haven't had to focus on revenues. Their strategies were to get users first and then worry about money. To me the real test will be what is Facebook's revenue the first year they go public. If they haven't shown any significant growth, then I'd be worried.

michaelchisari• 15 years ago

Did you know that MySpace, on a per user basis, is twice as profitable as Facebook?

One of the problems these companies will face, having coasted on not focusing on revenue for so long, is how to find ways to generate revenue without alienating your user base.

It's a very tricky question, and done wrong, can do some serious damage to your site (I'm looking at you, Digg)

nivertech• 15 years ago

* Unlike Facebook, twitter provides me a real value.

* They not even started yet serious monetization efforts.

* $10B or not is just a function of how devalued USD currency is and at which stage of the bubble we are ($50B for Facebook, $6B for Groupon).

axod4• 15 years ago

I think it's the orders of magnitude out bit that people object to.

Twitter is obviously fun and useful for some, eg journalists who want to pad their celeb gossip news story out with "X tweeted Y", etc

But is it really worth $10bn to humanity? Nope.

Is it really ever going to be worth anything close to that based on revenue? Again, nope.

jdminhbg• 15 years ago

"But is it really worth $10bn to humanity? Nope."

How did you arrive at that conclusion?

pclark5• 15 years ago

I think you're dreaming. :D

Is Twitter worth $10bn today? Probably not. Could it be? Easily. Hell, I'd invest assuming the CEO was good.

Twitter gets so much attention from its users each day. It has replaced email for social things. I have made so many friends and connections on Twitter it's almost ridiculous.

It's where people go to converse, to ask questions, to find out what is happening in the world. It's why Al Jazeera paid for sponsored search terms during Egypt.

Twitter is giving a voice to people that are previously unheard, and in the future, this will be huuuuuge in 3rd world countries - remember that Twitter can work entirely via SMS. We have no idea what is happening in most parts of the world, but with Twitter, we can listen and learn.

I genuinely think Twitter is one of the most revolutionary products on the internet since email, it has the potential to be significantly more impactful than Facebook, Microsoft or even Google can dream of.

The only thing holding Twitter back is people like you who look at Twitter and don't get it, it is so simple people cannot see why its valuable. :)

You can follow me on Twitter here: @plc

mikeryan• 15 years ago

At this point I'm not sure any of these investors are valuing twitter as a company based on revenues, this is just strategic or "greater fool theory" investing. These companies just think they will be able to sell these shares at a higher price then they bought them to some greater fool later on.

Rariel• 15 years ago

So nobody is going to say anything about this :Twitter may be valued as high as $10 billion, based on the microblogging service’s recent low level sale discussions with both Facebook and Google executives.

Maybe I missed it but I had no idea Facebook or Google was interested in acquiring Twitter. Google, I expected, Facebook is a bit shocking...What would they do with it? Shut it down? FB needs to be careful--they're already seen as big brother to many.

sfphotoarts• 15 years ago

I wonder how skewed this community is. Within the HN world there is a healthy skepticism about the value of Twitter, yet at the same time support for it, and everyone claims to be getting value from the service.

Outside of this bubble what I hear is that FB subsumed all of Twitter's features a year or two ago and they have abandoned their twitter accounts. Of course this is just my experience and may not be representative in the bigger picture, but having worked on a project that analyzed the various hoses from Twitter what I found was that when you eliminate spam and filter out all the people that tweet less than one every couple of days, the actual number of people using the service (at least for lang=EN) was dramatically lower than the accepted numbers. Possibly the growth is outside of the English speaking world.

Of course there is all the hype around Twitter saving kidnapped children in China and being behind revolutions in the Middle East, but I suspect these are news stories without much substance. Given that Egypt is 165 and China 105 in world literacy ranking (CIA world fact book) I seriously doubt that Twitter plays a role anywhere close to word-of-mouth communications.

That said, who knows what it's worth. If Twitter had come up with the "Like" idea and integrated that into its service before FB did then I might agree with the valuation, but in this economy he who holds the most ad-centric data, and who garners the most user eyeballs and time has the most potential to monetize. And right now that's FB.

rst• 15 years ago

Well, the attitudes you cite aren't really in conflict; there's no contradiction in finding the service to be useful, and still having doubts about the valuation of the company.

That said, if you view twitter as an advertising medium, then read-mostly users who tweet rarely (or never) could still be a revenue source, so long as they're reading ads along with everything else. A teenage kid who checks for tweets from Justin Bieber five times a day is a pretty valuable ad target (for some ads), but it might be hard to find a trace of them in the data feeds.

lionhearted• 15 years ago

I'm reading "Seeking Wisdom", which outlines Warren Buffet and Charlie Munger's investing philosophies. Two things stand out -

1. They almost never invest in high technology.

2. They talk about how an unsexy business that produces value for its shareholders is just as good as a sexy one. Money has no memory - money you made from dividends or equity increases in a company that sells bricks is just as good as from a company that sells something more exciting.

Thus, I wonder if a lot of high tech companies are like airlines - people own them because they're sexy, whereas totally decent boring unsexy companies are much lower valued.

That doesn't get into whether Twitter will justify the $10B valuation or not, but interesting to think about - saying Buffet and Munger have done pretty well would be quite the understatement.

acabal• 15 years ago

While I've never read that book, the one bit of Buffett advice that always stuck with me was, "Invest in what you know."

And I definitely know that Twitter ain't worth 10 billion dollars.

zaidf• 15 years ago

And I definitely know that Twitter ain't worth 10 billion dollars.

That's a lot like saying "I know x startup will fail." You are probably right considering vast majority of startups shooting for the stars fail. But you also don't get very many points for predicting what's gonna fail. And so it is better to invest in 30 companies where 29 turn out to be absolute crap and one turns out to be Google versus investing in 30 average companies that have average returns or NOT investing in any company at all.

Of course you can invest in one solid company and have that be google. But I don't know very many people that have done that.

yequalsx2• 15 years ago

Charlie Munger is worth reading and listening to. He once said in an interview that a person should only be allowed to make 20 trades in their lifetime. (Or some smaller number.) His reasoning was that it would limit emotional influences when making investing decisions.

I've been wondering if Microsoft's stock price is low due to the perception that they aren't sexy. Their corporate division is making loads of money and they are priced like a low margin commodity business. Of course, maybe their long term survivability is in question and so the stock is low.

I would rather buy stock in Microsoft at its current valuation than buy stock in Twitter at its current valuation.

cosmicray• 15 years ago

> I've been wondering if Microsoft's stock price is low due to the perception that they aren't sexy.

Stock prices are (usually) set based on two factors: The current earnings/revenue situation and future expectations.

MSFT and APPL both have similar current earnings. Future expectations may be an entirely different matter.

If twitter is being touted as a $10B corp, then someone must have some expectations of increased future value.

axiom• 15 years ago

Twitter has about 200M users, of which about 20-30M are actually active.

That's $50 per user. Or around $400 per active user.

Nuts.

Twitter Valued at $10 Billion

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