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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
by 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 agoWho 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 agoOne 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 agoReally 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 agoI disagree. They need one serious bidder and one competitor who wants to screw the serious bidder.
- deleted 16y ago[deleted]