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The difference is that Yahoo actually made real money and had valuable assets other than its core offerings (Alibaba). Twitter is just an overgrown, overfunded

The difference is that Yahoo actually made real money and had valuable assets other than its core offerings (Alibaba). Twitter is just an overgrown, overfunded startup without an obvious path to revenue strong enough to support its operations and growth.

jfoster 10y ago
Twitter makes ~$2 billion in revenue. Their market cap and funding may not fit, but they're a pretty huge company.
- katzgrau 10y ago
  Huge waste of money is more like it. Call me an old-fashioned businessman, but $2 billion in rev still sucks when the end result is a $500MM loss. Even at that scale, $500MM is no small gap to close, especially when your primary competitors are wildly superior and better platforms for your core business are emerging all of the time (snapchat, for instance). Scaling up a weak business to epic heights doesn't magically make it a success for shareholders. Initial investors, sure.
- katzgrau 10y ago
  I should add that when I said "overgrown startup," the implication wasn't that it's a small company. I'm saying that they've operated at a loss for all of their existence (like many SV startups) and never turned that around. Scaling while failing, and they hoped that another round of investment (IPO) would give them time to change that.
- Kadin 10y ago
  Two billion in revenue is a lot less impressive when you consider that they spent half a billion more than that in the process. Generally, people like their businesses to reliably turn $1 into $2 over time, not turn $2.50 into $2 over and over. Particularly if what you do with the other $0.50 is build something that's only valuable because of the group behavior of a few billion fickle users who will almost certainly desert you at some point in the future for something newer and shinier. But nice work if you can get it in the meantime.
  - katzgrau 10y ago
    Generally, people like their businesses to reliably turn $1 into $2 over time, not turn $2.50 into $2 over and over. I genuinely laughed out loud that you qualified that with "generally." Some quality dry sarcasm if I've ever heard it.
  - eridius 10y ago
    > a few billion fickle users If Twitter actually had a few billion users it would be pretty valuable. IIRC it has just a few hundred million.
- charlesdm 10y ago
  Maybe the tax losses would be worth something, but I don't consider it likely someone to pay $15.2bn for Twitter. Heck, even $5bn is still a lot of money to pay for a business that's losing $500mm a year. Could you fire two thirds of all the staff and make it profitable?

jfoster 10y ago

Twitter makes ~$2 billion in revenue. Their market cap and funding may not fit, but they're a pretty huge company.

katzgrau 10y ago
Huge waste of money is more like it. Call me an old-fashioned businessman, but $2 billion in rev still sucks when the end result is a $500MM loss. Even at that scale, $500MM is no small gap to close, especially when your primary competitors are wildly superior and better platforms for your core business are emerging all of the time (snapchat, for instance). Scaling up a weak business to epic heights doesn't magically make it a success for shareholders. Initial investors, sure.
katzgrau 10y ago
I should add that when I said "overgrown startup," the implication wasn't that it's a small company. I'm saying that they've operated at a loss for all of their existence (like many SV startups) and never turned that around. Scaling while failing, and they hoped that another round of investment (IPO) would give them time to change that.
Kadin 10y ago
Two billion in revenue is a lot less impressive when you consider that they spent half a billion more than that in the process. Generally, people like their businesses to reliably turn $1 into $2 over time, not turn $2.50 into $2 over and over. Particularly if what you do with the other $0.50 is build something that's only valuable because of the group behavior of a few billion fickle users who will almost certainly desert you at some point in the future for something newer and shinier. But nice work if you can get it in the meantime.
- katzgrau 10y ago
  Generally, people like their businesses to reliably turn $1 into $2 over time, not turn $2.50 into $2 over and over. I genuinely laughed out loud that you qualified that with "generally." Some quality dry sarcasm if I've ever heard it.
- eridius 10y ago
  > a few billion fickle users If Twitter actually had a few billion users it would be pretty valuable. IIRC it has just a few hundred million.
charlesdm 10y ago
Maybe the tax losses would be worth something, but I don't consider it likely someone to pay $15.2bn for Twitter. Heck, even $5bn is still a lot of money to pay for a business that's losing $500mm a year. Could you fire two thirds of all the staff and make it profitable?