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Twitter valued at $1 billion

Twitter valued at $1 billion

Twitter might annoy some and delight others, but at least seven venture capital firms think its worth $1 billion.

Like it or loathe it, there's no getting away from the fact that Twitter is turning heads in the corporate world - and people appear to be willing to put their money where their 140 character mouths are.

As reported over on Silicon Valley Insider, the popular microblogging site is running another round of funding, and it's looking like a big one: venture capitalists are allegedly looking to pour $100 million (£62.24 million) into the company.

The investment from seven separate venture capitalists values Twitter at a staggering $1 billion (£622.4 million) - not bad for a company which, at its heart, is pretty much just a web-based SMS service and a significant boost on its last round valuation of $225 million (£140 million).

The investment comes at the same time as the launch of an unofficial App Store-inspired service dubbed OneForty. As reported over on AppScout, the service - currently in private beta - features 1,332 (and isn't it a shame they couldn't find five more?) applications built around Twitter's API in categories including Analytics, Games, Browser Plugins, Business, and Automation. Both free and paid applications are available, but there's no mention of how much of a cut Twitter gets of the proceeds - if any.

This is, of course, Twitter's problem: despite its incredible popularity, the service struggles to find a path to profit. With its entire raison d'ĂȘtre being to offer a free, quick communication system it's hard to see precisely how it can turn traffic into cash. With companies increasingly interested in the holy grail of real-time search data - and sitting as it does on possibly the biggest and freshest cache of such information - that could all change very quickly indeed. For now, however, the investors are putting money into a company which - in its own words - "[spends] more money than we make."

Can you see the lure of Twitter that would cause venture capitalists to value the company at $1 billion, or does it just seem like more Web 2.0 hype? Could we be heading for another dot-com bubble? Share your thoughts over in the forums.

18 Comments

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perplekks45 25th September 2009, 11:27 Quote
Overrated, bloated piece of Web2.0 hype.
CardJoe 25th September 2009, 11:34 Quote
Quote:
Originally Posted by perplekks45
Overrated, bloated piece of Web2.0 hype.
logan'srun 25th September 2009, 11:39 Quote
wow, I must say I've never read Twitter or even been to their website - and I'm not saying that because I'm aloof or think I'm special. I've just never been there. is there really that much potential to make money on Twitter at it can be valued so high, or is this just another way to ensure we stay in the so called 'Economy Crisis' for another 5 years?

I mean, maybe I'm old, but what really is the allure in reading that your friend had a tuna on rye twitter that is so appealing?
Hugo 25th September 2009, 11:55 Quote
Quote:
Originally Posted by CardJoe
Quote:
Originally Posted by perplekks45
Overrated, bloated piece of Web2.0 hype.

Twitter sucks, it's death is inevitable.
AshT 25th September 2009, 12:11 Quote
Personally, Twitter was fun for literally 5 days, then I got bored and haven't been back.

If I owned Twitter - I would float it, make a billion dollars and hide on a desert island because the investors would soon realise what a well-marketed con the whole thing is.
kosch 25th September 2009, 12:17 Quote
Twitter valued at wasting an estimated $1 billion worth of man hours since its incecption.
mi1ez 25th September 2009, 12:18 Quote
I use twitter more than any other network. Simple, quick and integrates well into Firefox through extensions. I have enough friends on there and follow some news services.
smc8788 25th September 2009, 12:34 Quote
I find it funny how no one who uses it has realised how utterly pointless it is. Every time I hear someone say "oh so-and-so twittered this", I just want to punch them square in the face.

It seems that anyone can come up with some pointless idea and put it on the web, so long as it's addictive enough and draws people in then people will be willing to throw money at you. Look at what you get for that $1billion; the company has next to no assets whatsoever, is making very little profit, and has a business model that relies on the fickle Internet-goers who are just looking for that next popular social networking site to dump all of their spare time into.

I say we all blame Stephen Fry.
Paradigm Shifter 25th September 2009, 13:13 Quote
From what I understand, text messaging never really took off in the States the way it did in, say, the UK. Twitter basically appears to be public text messaging for the always-connected age of the internet, at least IMO.

Not seen the appeal of it myself, but then I've avoided things like Facebook/Myspace/Livejournal like the plague as well.
NethLyn 25th September 2009, 15:37 Quote
Total BS, there's one mate whose feed I follow, the other guy has his own blog and just puts the tweets on there so you stay on the one page to see everything. I'll never, ever use Twitter myself after letting myself get caught up in the Facebook hype (and I haven't lost the irony of not being friends anymore with the person that introduced me to FB).
ToMMo 25th September 2009, 16:49 Quote
I think from a commercial point of view its the future applications it may have. I heard one report that mentioned having sensors in almost everything that were connected to Twitter. The example they used were sensors in your plants and they would send you a message when they needed watering. When you think of it from that point of view rather than a social networking side you start to see why people pump money into this for these little gimmicks. However, I myself have never used Twitter so probably don't know what I'm talking about :D
rshoerack 25th September 2009, 16:58 Quote
For something supposedly worth $1bn, everytime I've tried to use it there's been at least one technical clart up or another.

That plus the twee graphics makes me feel like I'm trapped on the Loco Roco loading screen.
The_Beast 25th September 2009, 23:29 Quote
twitter = useless pile of crap. I don't really care what you're doing right now, nor does anyone else
El Rando 26th September 2009, 00:34 Quote
$1 Billion ey...I say bit-tech start one of these thingy's and call it www.bitterbobookface.com
Just think, with all of us guys behind you, you'll be bathing in money in no time.
smc8788 26th September 2009, 00:39 Quote
Quote:
Originally Posted by El Rando
Just think, with all of us guys behind you, you'll be bathing in money in no time.

No, I'm afraid we'd also have to involve some talentless celebrities to achieve that kind of success.
perplekks45 26th September 2009, 09:49 Quote
It shouldn't be too hard to get people like Kanye on board though. Just spread rumors about award ceremonies... ;)
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