Value of a tweet
Twitter is everywhere. EVERYWHERE. It seems like every celebrity and wanna-be celebrity has a twitter account. They honestly believe that people want to hear what they are doing, what’s on their mind and where they are. And while the popularity is huge, and there is no denying the impact, even if short term, Twitter has had on society, the question remains; what’s the value of twitter?
I’ve heard some increadible numbers. Hundreds of million. Billions. Tens of billions. Numbers that seem to have no relevence any more. Ever since the bailouts, billions of dollars seem common place. The government is printing trillions, and giving away billions left and right, so Twitter must be worth at least a billion, right? Well, no. I don’t see how it could be worth nearly the same as some of the largest, most well established companies in the world. Companies which have been around for decades, have proven revneue and have stood the test of time.
The fact that Twitter generates no revenue is it’s biggest ace. Without revenue, numbers can be thrown around and dreams can be sold. But that’s the catch. As long as they generate no revenue they can value it whatever they wish, however, the moment they start generating revenue the value of Twitter will plunge from a billion dollars to maybe ten million (which is still a great value for such a website).
If I’m Jack, Evan of any of the other prinipals involved I sell now before I try to prove to anyone what the actual value is. They are sitting on hype, massive hype, and that alone should allow them to sell it for 20 times it’s actual worth. Then again, the same can be said about nearly all web start ups. Sooner or later people will realize that the value being paid just doesn’t make sense. To value Facebook, My Space, Skype, YouTube and many other web 2.0 which were valued or sold for over a billion dollars is incredible. Ask Google how much net revenue YouTube generates, or Ebay about Skype. The math doesn’t make sense and never will.
And yes, I understand that as a serial startuper (not a word, right?) it doesn’t benefit me to say so, but it’s the truth. The days of over paying for startups will soon end, so if you have the opportunity, take the cash and walk away.