Twitter Is Worth One Billion? Why? - The UpStream

Twitter Is Worth One Billion? Why?

posted Saturday Sep 26, 2009 by Jon Wurm

Twitter Is Worth One Billion? Why?

This just boggles my mind. Twitter is 3 years old now and hasn't even generated any revenue let alone profit so WTF? Recently however founders Evan Williams and Biz Stone have managed to procure another cool $100,000,000 to finance its opperations over the next year. They had $55 million from one investor and just raised another $35 million from another although the identity of the investors is unknown but their two newest share holders are Insight Venture Partners and T. Rowe Price. I wonder if they had anything to do with it? The good news for twitter is that they won't have to sell out to a corporation and now have the ability to expand their employee base of 60, get more computers and work on their outage problems.

Ken Marlin, a technology investment banker in New York with Marlin & Associates, said,

This is a smart move by Twitter because it buys them more time to capitalize on their momentum and come up with a business plan.

This is a gutsy move by investors considering that twitter is still trying to build its customer base upwards of the 54 million current users and hope to hit the 1 Billion mark by 2013 and still doesn't really have a business plan three years after starting. They released a statement saying,

It was important to us that we find investment partners who share our vision for building a company of enduring value. Twitter's journey has just begun and we are committed to building the best product, technology, and company possible.

Some internal documents surfaced showing them achieving $140 million in revenue next year. Which is interesting because it sounds like they haven't even officially decided how that's going to happen. However, they seem to have considered selling ads, charging fees for company twitter accounts or selling access to people's opinons (eek).

I commend them for wanting to do it themselves but I am suprised at how taken investors are with a service that is the same as Facebook with just status updates. Also, even though they have 54 million users as we reported earlier this year the majority of users remain active on the service for around a month and them stop using it completely. Part of their problem is that status updates get old after a while and thats basically all you can do right besides sharing some pictures so they need to figure out how to keep people around. Do you think Twitter is really worth $1 Billion? What should they do to keep people around?


Login to CommentWhat You're Saying

Be the first to comment!

We're live now - Join us!



Forgot password? Recover here.
Not a member? Register now.
Blog Meets Brand Stats