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Given its popularity, do you really think Twitter is going to exit for less than $10B? Those exits are rare, but so is the position that Twitter is in.
by jackowayed 16y ago
Given its popularity, do you really think Twitter is going to exit for less than $10B? Those exits are rare, but so is the position that Twitter is in.
- axiom 16y agoWell, couldn't that same argument have been made about Friendster, or MySpace, or Digg etc.? I don't know what the odds are, but surely there's at least a 25% chance that twitter will fizzle out. So it's 25% chance of nothing, and 75% chance of, say, a 3x exit. I dunno, that seems crazy risky to me. Someone commented below about the secondary market - that actually makes a lot of sense I think. I guess when you're investing in twitter there's enough liquidity in the secondary market that you can probably get out if you need to.
- Complete 16y ago"25% chance of nothing, and 75% chance of, say, a 3x exit. I dunno, that seems crazy risky to me" If these are the odds, the expected outcome would be that you more then double your money. 25%0+75%3=2.25
- harryh 16y ago1) Even if twitter fizzles it won't be worth $0. 2) It's possible that the investors in this round have a preference to get their money out first. So 25% chance of nothing is almost certainly wrong.
- dotcoma 16y agoare you sure? How much is MySpace worth, given that they probably are losing money? (not to mention, members)
- ry0ohki 16y agoStill somewhere greater then $0, probably still several million from contracts and traffic alone
- elbrodeur 16y agoMySpace's exit was $580MM. They had an estimated revenue of $300-$400MM in 2009. They might not be Facebook, and may never have a very high valuation, but the exit was very profitable for those involved. Twitter can just as easily be great for it's stakeholders and fizzle out as a service.
- dotcoma 16y agoyeah, but their 'exit' is similar to twitter's current round: it's a measure of how much somebody thought they could/would be worth. I'm asking how much they are worth now!
- axod 16y agoIt's about as popular as ICQ in terms of volume of communication. Do you think ICQ is worth $10B?
- jackowayed 16y agoAre you measuring "volume of communication" in messages, despite the fact that ICQ messages are one-to-one and private, whereas Twitter messages are one-to-many and (for the most part) public??
- axod 16y agoIs it obvious that one (public) is more monetizable than the other (private)? Facebook is hugely profitable, but its messages are private...
- jackowayed 16y agoWell, Twitter's actually bringing in decent revenue thanks to search deals. There's a general agreement that realtime search of tweets is useful, whether or not it's particularly monetizable. And calling Facebook "hugely profitable" is a stretch.
- axod 16y agoTwitter has like 2 strategic 'customers' hasn't it? That seems like a really risky revenue stream to me, if you can even call it that.
- steveklabnik 16y agoYou could argue that Mozilla has one.
- axod 16y agoTotally agree. And similarly (especially with the rapid growth of chrome) I think mozilla is pretty vulnerable.
- bcrescimanno 16y agoOne thing I hope we've learned is that popularity does not necessarily equal profitability.
- drusenko 16y agoThat's absolutely right. Generally speaking though, you need to be popular (a lot of customers) in order to generate significant profits. Since "making something people want" is generally considered a harder problem than monetizing that service when you have something people want, it's not entirely irrational to focus on the former before the latter, even if it doesn't always pan out.