How Much is Twitter Worth? Less Than You Think | Hacker News Reader

How Much is Twitter Worth? Less Than You Think

gigaom.com

14 pointshshah20 comments

Om Malik seems to be the king of expert sounding valuations that signify nothing. There was an article at the peak of web 2.0 that went something like

Myspace (x users for y dollars)

Youtube (x1 users for y1 dollars)

...

Therefore users are worth (z+z1+...)/(x+x1...) and we can use that as a metric to value other sites.

But ignored all the cases of sites with x<i> users worth zero dollars.

Agreed. User base in a internet facing app means something when users visit the site to interact. Twitter is such an open platform for communication (like email, sms, and hell, even the web) that monetizing it as a service seems impossible.

I would venture to guess that based on revenue Tweetie is more valuable that Twitter itself. Myspace, Youtube, Facebook, they all have pageviews.

Twitter was founded as an SMS service and won't ever be able to fully monetize the platform unless they close the API (which they won't).

Impossible? They're already monetizing by licensing their firehose to Google and Microsoft. http://abcnews.go.com/Technology/AheadoftheCurve/wireStory?i...

If you have 70M+ users, it takes a small amount of ingenuity to make money, even in the worst case (perhaps they're all Linux users).

Agree 100%. IMHO the biggest mistake Twitter made was allowing others to control the client people use to post tweets. The majority of people are using 3rd party clients over which Twitter have no control.

To them, twitter are just a backend message passing system. Monetizing a backend message system is orders of magnitude harder than monetizing a client which actually has eyeballs.

While I think you're right in the general case, Twitter has its retardedly strong brand which makes them a very important exception.

Nope, that's still more.

By orders of magnitude.

70M users? Monthly actives? That seems really high. Other estimates showed ~22M in June, right as growth slowed in the US.

Also, obligatory this-debate-is-retarded comment.

Not really obligatory on HN, actually.

Do they have a business model that is proven to make any money yet? No?

Then that is how much they are worth.

Failing to grasp this simple idea is why large chunks of the world economy have tried to collapse twice in the past decade or so.

Anything beyond this isn't a valuation, it's a gamble. A few gamblers do win big, but most of them lose money in the long run.

Internet companies don't necessarily require a business model. Remember YouTube? They were worth $1.65B to Google. They didn't make a single cent when they were acquired.

The virtual world is an attention economy. The most attentive eyeballs attracts the most money. There doesn't directly need to be money changing hands.

>> "They didn't make a single cent when they were acquired."

I believe that's a myth.

The fact that other stupidly over-valued companies over-value companies that make no money doesn't make things any better, it just builds a higher stack of cards.

At least in the case of the YouTube acquisition, Google had both a strategic goal (own the small company that's otherwise at risk of getting sued off the planet and leaving you as collateral damage) and a realistic expectation of revenue generation in the near future (via advertising, which is Google's business model and something it was already doing very successfully in other contexts).

I fail to see how anyone investing in Twitter benefits in either of those ways right now.

The company‘s revenue model has yet to be tested. We believe that most revenue generation options available to the company have the potential to alienate at least some of Twitter‘s user base. Twitter may not have adequate time to revise its models before it loses its critical mass and reputation.

Is it possible to wait too long to begin charging someone for something?

Yes. Your company will run out of money eventually.

That's still a valuation of more than half a billion dollars for a company with no revenue.

I was wondering if something like corporate twitter works?

I think this is a great idea, I'd love to have twitter in-house.

Also, I would like to see a personal/professional attribute...I follow a lot of people that tweet personal things I have no interest in.

Yammer.com has been around for a while. It didn't catch on at my place of employment.

Probably not.

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