Twitter’s billions

By Felix Salmon
September 17, 2009
$1 billion valuation. At these kind of levels, one assumes, there must be some idea of how to make money in the future. I also hope the founders are beginning to cash out at this point: or does Twitter really have a burn rate which would make Michael Wolff proud?

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Twitter seems to have quadrupled in value over the course of just a few months: after raising $35 million at a $250 million valuation earlier this year, it’s now raising another $50 million at a — wait for it — $1 billion valuation. At these kind of levels, one assumes, there must be some idea of how to make money in the future. I also hope the founders are beginning to cash out at this point: or does Twitter really have a burn rate which would make Michael Wolff proud?

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Comments
4 comments so far

“one assumes, there must be some idea of how to make money in the future”

Where were you ten years ago? There’s no idea of how to make money, just a prayer. And you see where that got all those dotcom investors who used that “strategy”.

Posted by KenG | Report as abusive

If an entrepreneur is going into a project with just a prayer to make money and not a clear cut plan on how to eventually become profitable then they deserve to fail. Those are the one’s that failed during the dotcom. Myspace and Facebook are both on the profitable side now and proving that there is money in social web services.

Twitter however, is a one trick pony that only has star appeal. Once the star appeal dies down, the website will go to the wayside and some investors are going to lose heavily. I think the only chance twitter has is to expand and try to buck facebook head on while it has the steam.

Posted by Rburns | Report as abusive

You clearly don’t understand. It’s not about profit, it’s about membership and eyeballs. This is the new New Economy, and this time it’s different. Really. No, seriously.

Posted by Channon | Report as abusive

So far I have been able to identify two benefits to Twitter:

1. It appears to be excellent for organizing rallies and revolutions; and

2. It is an effective means for mobile restaurants (hot trucks) to inform the world where they are in real-time.

Most of the rest of it seems to be primarily associated with gossip and “fast-breaking news” in the middle of an era when it seems everyone must be breathless about everything.

I wonder what the total market value is for all of the multiple outlets for breathless communications dumped to everybody. Presumably Twitter would only be a relatively small percentage of that. I skipped the dot.com bubble and burst because I started to add up what the shills and stock market were claiming the sector was worth and it did not appear to be a sustainable percentage of the broader economy.

Posted by rd | Report as abusive
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