Friday, September 18, 2009

Show me the money

It's been reported on TechCrunch that Twitter is seeking investment funds from venture capital firms.

No surprise really given Twitter doesn't appear to have any obvious or substantial revenue stream.

What did surprise me though was the valuation put on the company. One billion US dollars!

Obviously a large perecentage of that billion is the brand that has been built.

But how did they determine a valuation of that magnitude? Especially given it could be years before Twitter turns a profit.

If it ever does.

Just think about how quickly Facebook outgrew MySpace then imagine what would happen if a better cooler Twitter alternative came along.

Of course I could be completely wrong.

But having lived through the dotcom bust I can't help having a slight feeling of deja vu.

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