Is Twitter really worth $1 billion?

April 3, 2009

You may have heard of a little site called Twitter – it’s quite popular. You may also have read the rumors (and subsequent debunking) that Google is looking to buy Twitter. But if someone did want to buy the site, whether it be Google, Microsoft, or A. N. Other, the asking price would be upwards of $1 billion. Is that really value for money?

As John reported this morning, TechCrunch today claimed that Google was looking to buy Twitter. BoomTown then rubbished the claim, stating that according to its sources Twitter and Google were talking about partnering rather than selling/buying. I’m sure the truth will out in time.

However, there have been some interesting tidbits emerging from the hoo-hah around the blogosphere concerning this non-deal. In a later article, TechCrunch claims that Twitter “wouldn’t sell even for $1 billion.” It quoted an inside source as saying, “He [CEO Evan Williams] may blink, but he wouldn’t do it.”

As big a fan I am of Twitter, and I truly do love it as a simple-yet-utterly-effective means of communication, turning down $1 billion would seem to be an absolutely stupid decision. Not that a figure close to that has yet been offered but it could do if Google get desperate enough to grab the brand, its users, and the user-driven search possibilities that come with it.

Don’t think Google would pay that much? The search giant paid $1.65 billion for YouTube a couple of years ago, and the online video site has hardly been a cash cow since. Whether it would make the same mistake twice isn’t clear.

If I was running Twitter then I may well talk up the amount of money the company is worth but were that stupidly high valuation actually be offered, I’d snap the would-be purchaser’s hand off. As popular and talked-about as Twitter currently is, there’s no guarantee current growth levels will be sustained. And even if the site does grow to near-Facebook levels, Facebook still hasn’t worked out how to monetize the site to take advantage of its millions of users effectively so why should Twitter manage to do so either?

Twitter is very now, very of-the-moment, but as with every piece of technology and Web phenomenon, that won’t last forever. Surely selling while the buyers are there would make more sense than hanging on until everyone loses interest.

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One Response to “Is Twitter really worth $1 billion?”

  1. Roger Milson:

    >Facebook still hasn’t worked out how to monetize the site

    Twitter is in exactly the same boat. Evan Williams is dreaming if he thinks anyone is going to give anything close to $1 billion in the middle of a global recession, that may yet turn into a depression.

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