Looks like they are betting on potential. To be honest, Twitter is so mainstream that it is entirely new medium of news/discovery/conversation just like Radio/TV/Internet. I'm sure they will be extremely profitable company in the future.
1) Tweets disappear quickly from a user's timeline 2) Most people have few active followers
1 and 2 work against each other to form a negative feedback loop. The result is the vast majority of users use it passively to read celebrity tweets, nothing more.
Twitter must know this as their growth is already peaking and they're not making much money. Expect to see more drastic measures to try and turn what they already have into something profitable. They've peaked.
How many are spam?
How many are shady i.e. pay folk in the Philippines or Pakistan to send out tweets all day, to boost the numbers?
That's only 5,700 tweets a second.
An average IRC network for example does more than that.
Many users are following so many accounts that they can only read only a small subset of their timeline. I wonder if Twitter's apps and services also have to evolve substantially like Facebook's did to include more elaborate filtering and ranking options.
What seems odd to me is that they're filing for IPO right now. Do they honestly expect public markets to buy their "but it's becoming ubiquitous" story? 2000 wasn't that long ago.
FB/Google/LinkedIn didn't have to go public but they had to due to SEC regulations and/or their existing investors.
When they do, I believe they will have a lot more income.
They're bleeding money.
If they don't IPO now, how much longer could they last for?
They're also on track to almost double their from 2012 to 2013. Why don't people ever look at the costs? There's a reason why they are on track to lose over $100 million this year.