Is Twitter worth $1 Billion?

By Justin Mann on September 25, 2009, 3:51 PM
Twitter's financial stability has been up in the air for some time. The service has faced all sorts of issues since its inception, from poor user retention to a series of failed buyouts, buyout rumors and more. This hasn't stopped the company from expanding, and with growth, the need for cash has risen. It's been demonstrated already that Tweets can be used by third parties to make money, so the question isn't whether or not Twitter can find investors -- but rather, how much the service is actually worth.

Twitter lined up a substantial amount of cash recently -- around $100 million -- and an estimate that the company itself is worth ten times that. This is despite the fact that Twitter, as a standalone company, has yet to generate a steady stream of revenue since it launched. With anywhere from 45 to 55 million users and more on their way, keeping operations alive is going to be difficult. As they raise funds, they'll need to justify their worth.

Is Twitter truly worth $1 billion? If so, who would actually put down a serious bid? Current rumors are that Google, Yahoo, AOL and even Cisco are all potential buyers, but all of those companies will have to evaluate whether or not the service can be used to make a buck. To date, Twitter hasn't proved they can.

User Comments: 5

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Wendig0 Wendig0, TechSpot Paladin, said:

If by dollars, you mean rupiah, then yes I think it is. Otherwise, not even close. Twitter is way overrated.

levar said:

its not worth that much, as for who would actually put down a serious bid more an likely it would be google, but I doubt they will they aren't that stupid. Google could probably make there own twitter like site, if Yahoo can do it then surely google would if they wanted to. But I thing they would rather buy out twitter than create their own. Plus there are wayy to many sites that are twitter like for example and I can keep going..

Guest said:

It is always the users which are worth the money. Not the site. Not the service.

Google could buy up the users, and then move them closer to where they can make money from them.

windmill007 said:

Twitter will fade away after the initial buzz wears off. Myspace and Facebook are leagues ahead. They do the same thing plus a lot more.

Limilit said:

I dont think that myspace and facebook even close to that, but whatever each one can got their own mind.

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