Is @twitter worth $10bn?

11 Feb

Hot off the press is the news Twitter is attracting takeover interest, estimated to be around the $8bn to $10bn mark. Twitter, with its 200 million users, has certainly revolutionised communication online, but this is still an extraordinary sum of money considering not only has the site is yet to turn a profit, but also hasn’t figured out a plan on doing so.

But despite a fundamental flaw as a business the micro-blogging platform is attracting a lot of interest by the inter juggernauts Google and Facebook, both having held “low-level” talks. And even the savviest investors in Silicon Valley are predicting Twitter’s estimation is only going to rise. Two months ago, the company raised $200m to fund its development, valuing the business at $3.7bn.

There is evidently a lot of faith and maybe I don’t see the profoundly bigger picture (else I’d be in Silicon Valley), but I just think $10bn is an insane amount. The only companies it does make sense for is Facebook and Google which can use Twitter in conjunction with their existing applications. But still… $10bn for a site that is yet to turn a profit?

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