4 ms·

> I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall,

by beagle3 12y ago

> I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall, but it wasn't a monetization failure. Twitter has been around for almost 10 years now, and while they have been able to monetize somewhat, they haven't been able to turn a profit, and they don't seem to make great progress in that direction. It's not that they can't make money - it's just that so far, they haven't been able to make enough money to support the valuation.

tg3 12y ago
Twitter had revenues of $1.4b in 2014 - for a tech company (i.e. low marginal cost of delivery), I would say that's enough to support a $24b valuation.
- beagle3 12y ago
  $1.4B revenue, with $0.577B loss, so, they spend $2B to bring in $1.4B; Not a good business. We can't talk about a profit multiplier (Twitter has never had a single profitable quarter), but even if the $1.4B was all profit, a 17 P/E is not easilly supported. In my opinion, Twitter has been a zombie for a while - there's no way they'll have enough profit to justify a >$10BN valuation, and that's only if they stumble on some revolutionary profit model. If they don't, even $2BN will be lucky. Although what is likely to happen is that a stock market crisis will harm all companies, those with potential and those without. So Twitter will go down, "as if" for the wrong reasons, and the business model and its execution will not be found guilty (or not guilty).
- pyre 12y ago
  > $1.4b in 2014 - for a tech company (i.e. low marginal cost of delivery) You say this, but IIRC even with that revenue, Twitter hasn't been profitable, which is generally necessary for long-term viability. The "low marginal cost of delivery" hasn't materialized, if they can't turn a profit off of $1.4 billion.

4 ms·

> I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall,

by beagle3 12y ago

tg3 12y ago
Twitter had revenues of $1.4b in 2014 - for a tech company (i.e. low marginal cost of delivery), I would say that's enough to support a $24b valuation.
- beagle3 12y ago
  $1.4B revenue, with $0.577B loss, so, they spend $2B to bring in $1.4B; Not a good business. We can't talk about a profit multiplier (Twitter has never had a single profitable quarter), but even if the $1.4B was all profit, a 17 P/E is not easilly supported. In my opinion, Twitter has been a zombie for a while - there's no way they'll have enough profit to justify a >$10BN valuation, and that's only if they stumble on some revolutionary profit model. If they don't, even $2BN will be lucky. Although what is likely to happen is that a stock market crisis will harm all companies, those with potential and those without. So Twitter will go down, "as if" for the wrong reasons, and the business model and its execution will not be found guilty (or not guilty).
- pyre 12y ago
  > $1.4b in 2014 - for a tech company (i.e. low marginal cost of delivery) You say this, but IIRC even with that revenue, Twitter hasn't been profitable, which is generally necessary for long-term viability. The "low marginal cost of delivery" hasn't materialized, if they can't turn a profit off of $1.4 billion.