
How Much is Twitter Worth? Less Than You Think - hshah
http://gigaom.com/2009/11/10/twitter-valuation/
======
ojbyrne
Om Malik seems to be the king of expert sounding valuations that signify
nothing. There was an article at the peak of web 2.0 that went something like

Myspace (x users for y dollars)

Youtube (x1 users for y1 dollars)

...

Therefore users are worth (z+z1+...)/(x+x1...) and we can use that as a metric
to value other sites.

But ignored all the cases of sites with x<i> users worth zero dollars.

~~~
zachware
Agreed. User base in a internet facing app means something when users visit
the site to interact. Twitter is such an open platform for communication (like
email, sms, and hell, even the web) that monetizing it as a service seems
impossible.

I would venture to guess that based on revenue Tweetie is more valuable that
Twitter itself. Myspace, Youtube, Facebook, they all have pageviews.

Twitter was founded as an SMS service and won't ever be able to fully monetize
the platform unless they close the API (which they won't).

~~~
axod
Agree 100%. IMHO the biggest mistake Twitter made was allowing others to
control the client people use to post tweets. The majority of people are using
3rd party clients over which Twitter have no control.

To them, twitter are just a backend message passing system. Monetizing a
backend message system is orders of magnitude harder than monetizing a client
which actually has eyeballs.

~~~
tommy_teeth
While I think you're right in the general case, Twitter has its retardedly
strong brand which makes them a very important exception.

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jonknee
Nope, that's still more.

~~~
moe
By orders of magnitude.

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ivankirigin
70M users? Monthly actives? That seems really high. Other estimates showed
~22M in June, right as growth slowed in the US.

Also, obligatory this-debate-is-retarded comment.

~~~
ramchip
Not really obligatory on HN, actually.

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Silhouette
Do they have a business model that is proven to make any money yet? No?

Then that is how much they are worth.

Failing to grasp this simple idea is why large chunks of the world economy
have tried to collapse twice in the past decade or so.

Anything beyond this isn't a valuation, it's a gamble. A few gamblers do win
big, but most of them lose money in the long run.

~~~
abossy
Internet companies don't necessarily require a business model. Remember
YouTube? They were worth $1.65B to Google. They didn't make a single cent when
they were acquired.

The virtual world is an attention economy. The most attentive eyeballs
attracts the most money. There doesn't directly need to be money changing
hands.

~~~
Silhouette
The fact that other stupidly over-valued companies over-value companies that
make no money doesn't make things any better, it just builds a higher stack of
cards.

At least in the case of the YouTube acquisition, Google had both a strategic
goal (own the small company that's otherwise at risk of getting sued off the
planet and leaving you as collateral damage) and a realistic expectation of
revenue generation in the near future (via advertising, which is Google's
business model and something it was already doing very successfully in other
contexts).

I fail to see how anyone investing in Twitter benefits in either of those ways
right now.

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wensing
_The company‘s revenue model has yet to be tested. We believe that most
revenue generation options available to the company have the potential to
alienate at least some of Twitter‘s user base. Twitter may not have adequate
time to revise its models before it loses its critical mass and reputation._

Is it possible to wait too long to begin charging someone for something?

~~~
abossy
Yes. Your company will run out of money eventually.

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pierrefar
That's still a valuation of more than half a billion dollars for a company
with no revenue.

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manish
I was wondering if something like corporate twitter works?

~~~
thwarted
Yammer.com has been around for a while. It didn't catch on at my place of
employment.

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elblanco
Probably not.

