Twitter now worth $1 billion

At first many shared the same opinions about Twitter, when it launched. Even I asked myself how much more absurd could the idea of modern communication get.

However, millions of people around the world embraced this new way of letting friends and colleagues know what they are doing. Soon it seemed that everyone with a phone and a laptop computer began posting these short text-like status updates. One can post texts up to 140 characters in length and contribute to this new medium of exchanging information.

Last week the blog TechCrunch first reported about this new gargantuan value of Twitter, but this morning, The Wall Street Journal added more details about the latest fund raiser of $100 million in investments.

Now this small, San Francisco based, start-up, booted in March of 2006, has reached a monetary value of $1 billion, as estimated by investors. Although the fashionable micro-blogging site continues to raise millions in financing, it doesn't need the cash. Only recently it raised $55 million, but the company states it has spent less than half of it. Yet, they have big plans to overtake Facebook in terms of number of users. Marc Zuckerberg's successful keeping-in-touch-with-friends platform user base reached 300 million a short time ago.

Although Twitter, as a company, still doesn't generate any revenue, there are plans for premium services targeted at businesses. Advertising deals in some form are currently under discussions. It remains a gamble, yet a fascinating one. The biggest question everyone is asking, of course, is whether they can pull it off.

You can find Neowin on Twitter @NeowinFeed

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43 Comments

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I cannot believe for one minute that a website with no revenue can be worth 1 billion.

I hate their entire interface, sometimes it's really hard to tell what the hell people are saying between actual text and all the @nicknames and such. What a mess.

Aside from that, I felt just as most that Twitter only served as a platform to get closer to celebrities and such that are all riding the bandwagon right now, and that the fad will just die away on its own. They will have to bring much more to survive, but I did see one interesting thing from Twitter: you can use it as your news/update section on your website. You just put in the code or something like that to your webpage (not sure how it works). My friend used to hate updating his website with news because typing all his text within the html was a pain in the @$$, but now with Twitter it only takes as long as typing it. My boyfriend now is considering implanting it in his news section of his flash based website. So I think in that sense it can be useful... now they need to get rid of the text limit if they really want to do something substantial with Twitter.

"a monetary value of $1 billion, as estimated by investors."
Yes, the people who have poured their money into this have dreams that it is worth much more.
I estimate the value of my latest woodworking project at $1,000. Does that mean it is worth that?

"Although Twitter, as a company, still doesn't generate any revenue"
Good thing they have "plans" for some lucrative ad schemes.

Hilarious.But.Not.News

The difference is that investors have paid out real money for this. Not the full billion, but like 5% of it. It is really not that complicated.

how is it worth 1 billion? when they dont even make any income? .. can someone explain this? is it through advertisements?

Don't think they carry ads, at least the few times I've read some ones tweet there hasn't been any. So I haven't a clue.

Tweeter fits the brain capacity of average Joe, the same person who watches the reality shows and other garbage that's shown on TV, it's all cheap, cheesy and stupid but it produces revenue for the media companies.
So does Tweeter, so it will not die off.

Although Twitter, as a company, still doesn't generate any revenue

Hmm. It's like blogging. Craze -> Dies off. It's not going to make a great deal of money, and when something more versatile or better comes along, twitter might be remembered. Like myspace is.

I'm sure in today's valuations companies like Tripod, Lycos, Geocities and Hotfiles would all be 100 million dollar companies at least. Now. well.... I just really think it's a bit crazy!

All you got to do is create a website with lots of hits, and you are a millionaire.

Twitter was endorsed by lost of celebrities, who have their own stake in the company. As Ashton Kutcher started his own tweed girls jumped on the web to see what he is doing each day... Etc, etc, etc.. the point is that the website is badly designed cheap and stupid but if you get those hits you are the man. Once you hipe something so much, even if it's stupid people will buy into it no matter what...

Some investors are. They maybe sell 5% of the company, and get that much. Doesn't mean anyone is willing to pay a billion for 100%, or even a lot of people.

Reminds me of that South Park episode where all the internet stars are worth millions of theoretical money but treat it as if its real. lol

Only if you make it useful, following people that you actually find interesting, friends, family, etc. I follow a few developers big and small, news sites, and people who generally have something worth reading. The benefit? I get to see the latest news I'm interested in without having to dig for it.

Without having to dig for it? My gosh, man! Are you on dial up?!!

What is there to "dig" for that requires anyone to use ANY of those type worthless sites?

These sites should positively be against the law. Where's the EU to complain about something when you want them?

I'm sorry, I don't like waking up in the morning and checking through dozens of gaming sites, developer blogs, and so forth for a scratch of information I may not even care about.

Having a developer tweet a simple subject line that either interests me or not with a link to the newsbit is a lot easier. Hell, even from regular people like DrunknMonkey who was so kind to inform his followers of a badass Steam sale that I would've otherwise missed. I don't want to check Steam's news each and every day...

If you have the time though, by all means, don't use Twitter. I have work, college, and well, a life to manage. I'd like to make the most of my free time.

dead.cell said,
Only if you make it useful, following people that you actually find interesting, friends, family, etc. I follow a few developers big and small, news sites, and people who generally have something worth reading.

But that's the thing. It's just text updates. What's the difference between Twitter and a blog? Eventually people are going to realize they don't need Twitter for anything, because it doesn't do anything except provide them with a trendy URL. Twitter will have to add features to survive. It's not going to survive through "micro-blogging" alone.

Don't understand how anyone can value a company that highly when it doesn't generate any revenue and no one knows if anyone will want to pay for premium services, madness.

m.keeley said,
Don't understand how anyone can value a company that highly when it doesn't generate any revenue and no one knows if anyone will want to pay for premium services, madness.

Not just that, what about the stupidity service idea behind twitter where members are closing their accounts most often than any other online service.

cabron said,
Not just that, what about the stupidity service idea behind twitter where members are closing their accounts most often than any other online service.

It is about mind share. That has a lot of value. The same reason some websites names are worth more than others, when they are all just ip address.

Of course, a valuation of a billion dollars doesn't mean it is actually worth a billion dollars.