3 ms·

Can someone please explain how twitter is worth 3 billion?

• sushi 16y ago
  It's not.
• semanticist 16y ago
  Not to be too flip, but because someone's prepared to pay (proportionally) that much for it. Why are they prepared to pay that? Maybe they know something you don't, like Twitter's business plans, their current revenue, project revenue growth, those sorts of things. It's easy for people to say that Twitter has little-to-no value because they can't think of ways to make money out of it - but that only means that they shouldn't be in charge of Twitter, not that someone else couldn't turn a profit on it.
  • paraschopra 16y ago
    Yep, or as they say: "Beauty lies in the eyes of beholder".
  • harscoat 16y ago
    Understood about the acquirer. But is there a list somewhere of the revenue they generate from which source? This is not that much money for half the 100Mtweets/day over a year... "Twitter to Sell 50% of All Tweets for $360k/Year Through Gnip" http://www.readwriteweb.com/archives/twitter_to_sell_50_of_all_tweets_for_360kyear_thro.php http://www.readwriteweb.com/archives/twitter_to_sell_50_of_a...
  • d2viant 16y ago
    That's an excellent point. I'm guessing that when you invest that amount of money in a company you get inside information that the rest of us are not privy to.
• axod 16y ago
  It's kinda like the emperors clothes. They're the most wonderful lavish invisible clothes I've ever seen.
• nletourneau 16y ago
  Where else can you learn about what 50cent's dog is up to? I think the valuation is partly in response to how ingrained the twitter brand is becoming in pop culture.
• jdp23 16y ago
  There are two ways to look at it. One is in terms of likelihood and projected value of an IPO. Another is in terms of Twitter's value to an acquirer; in this case, there are rumors of a $5B offer from Google. Google in turn would be valuing it in terms of multiple assets: how much it would increase their search revenue, monetization opportunities if Twitter was in the Googleverse, employee acquisition, develoepr ecosystem, synergies with Android and Chrome, and competitive value vs. Facebook, Apple and whoever else they're concerned about. So while on the one hand a $3B valuation is astonishing, it's certainly defensible.
  • pyre 16y ago
    Who besides Google would be willing to pay $3B+ for Twitter though? It seems like a flimsy valuation it there is only one party willing to pay that much for it. What happens when that party feels they no longer have any interest in buying Twitter? A huge devaluation?
    • jdp23 16y ago
      One bona fide acquirer is enough to set the price. Ther potentially are others though. Off the top of my head: AOL. Facebook (if they could agree on the right valuation for Facebook stock). Maybe Fox (to go with MySpace and FoxNews). Baidu. It's certainly true though that it feels like a fragile valuation. I think the same's true for Facebook: there are plausible scenarios where they're worth $100B, and plausible scenarios where they're worth $10B. We shall see.
      • mdda 16y ago
        Really one needs two bidders - and the winner would bid $1 more than the looser. Of course, for the VCs funding it are either aiming for a big buyout or prepared for the long slog to earn the revenues to pay back their investment. Google doesn't need to be in any hurry, IMHO.
        • ahi 16y ago
          I disagree. They need one serious bidder and one competitor who wants to screw the serious bidder.