

Twitter Valued at $10 Billion - DigitalBoB12
http://blogs.wsj.com/deals/2011/02/10/twitter-at-10-billion-insanity/

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sfphotoarts
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
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.

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blhack
We all already know that this is absolutely insane.

That's $100 Million a year for the next _hundred years_.

~~~
zwadia
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.

~~~
blhack
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)

~~~
jimboyoungblood
_...but then a new service came along and replaced it for me_

What's the new service?

~~~
blhack
Thingist (<http://thingist.com>), which is one of my side projects.

/ _Warning: Rant_ /

Status updates as they exist right now freaking _suck_. There's not any
context, no way to organize them. They're disorganized. I used to always post
songs that I liked to my facebook or twitter feed so that I could share them
with my friends (as well as find them later). A problem was that I had to
search through 5 years worth of statuses to find the songs.

On thingist, it's just a list: <http://thingist.com/t/list/38/>

I used to do the same thing with quotes. If I found a quote I liked, I would
usually share it on facebook or twitter. Same problem as with the songs...and
now I have a list for it: <http://thingist.com/t/list/51/>

Or bars I like: <http://thingist.com/t/list/65/>

Or things that blow my mind: <http://thingist.com/t/list/134/>

etc. etc.

~~~
pclark
Most users don't want to add context or have to organise stuff. I signed up
for your service, added something I like, but having to fill out a form after?
Ugh, I am lazy.

The reason why Twitter is successful is that its so simple, there are millions
of use cases.

~~~
jonsmock
I definitely do the "want to share but also 'bookmark'" thing with my Twitter
updates. And, yes, hashtags somewhat solve this, but not really - at least not
for me. I like the idea of lists on Thingist, but I don't want to have to
categorize all my tweets.

If Thingist could automatically categorize my updates, but have a way for me
to re-organize them, that'd be ideal. Seems like a decent amount of people
fall into your same use case, where they tweet quotes, songs, videos, etc.
Some of these would be easier to detect than others, but it's somewhat doable.

This seems some like weird cross section between Twitter, Tumblr, and
delicious to me.

~~~
blhack
This is something that I've been trying to figure out for a while now...

Categorizing them is really, really hard to do. Look at the ways that this
user uses the site: <http://thingist.com/t/item/3051/>

"Things that make me feel better when I'm sad" would be impossible to detect
programatically.

"Show me all of the links to youtube or soundcloud I have posted" is totally
doable, and is something that will probably happen within the next couple of
days.

~~~
jonsmock
Touche. I'm thinking way too much like a programmer. Thanks for posting that
link, it's a good reminder of how different people are.

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mikeryan
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.

------
bretthopper
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
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
* 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).

~~~
axod
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.

~~~
pclark
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

~~~
axod
You're high.

> "It has replaced email for social things"

WTF? Maybe for you, if you say so, but people still get several orders of
magnitude more social email each day that twitter messages have ever been
sent.

> 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.

That's utter BS. Egyptians on the ground, rioting, don't think "Oooh! I must
tweet about this".

I'll give twitter 5 years before it's irrelevant. Maybe 2 years if AOL buys
it.

~~~
pclark
> I'll give twitter 5 years before it's irrelevant. Maybe 2 years if AOL buys
> it.

I'll take that bet thank you very much. :)

How about: if Twitter hasn't IPO'd / been acquired for greater than $10Bn in 5
years, you owe me dinner. (we live close to each other remember)

~~~
axod
Deal, although I'm not sure that's a good criteria.

Obviously Twitter is worth what someone is willing to pay for it. If AOL had
100Bn in the bank, maybe they'd buy twitter for 10Bn.

But to me, that wouldn't prove Twitter is worth 10bn on an open market, it
just validates that AOL is absolutely batshit crazy and likes losing money.

Maybe it's just me... Everyone in my extended family uses email regularly.
Most use facebook weekly or daily. Twitter rarely comes up at all.

------
Rariel
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.

------
lionhearted
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
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
_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.

------
axiom
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.

