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This is a bubble that says 175 million users are worth $57 each
AOL's purchase of The Huffington Post for $315m, or 10 times revenues, was bizarre. A valuation of $50bn for Facebook, which has revenues of $2bn, was extraordinary. But $10bn for Twitter? That's off the scale. It is 100 times revenues "“ this year's forecast revenues, not sales that have been generated yet. That cannot make sense.
It is reported, however, that Twitter has been talking to potential suitors, including Google and Facebook, about a deal at such a sky-high price. But Twitter's last fundraising was only two months ago and valued the networking site at $3.9bn. Is the company supposed to be more than twice as valuable already? Can Twitter's 175 million users be worth $57 a head? That's one hell of a lot of advertising to be conjured from somewhere. This is a bubble.
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10 February 2011 8:41PM
157 million today
10 February 2011 10:37PM
These are worrying signs of new bubbles forming.
Add companies like ARM to the mix - and its not hard to see where the next financial crisis is going to happen.
10 February 2011 11:13PM
How can "nothing" be worth 10 billion of anything?
10 February 2011 11:27PM
I just hope to God our pension funds aren't going in.
10 February 2011 11:29PM
Are Facebook, Twitter and the Huffington Post now too big to fail?
Answers on a tweet ....
11 February 2011 9:56AM
Twitter and Faebook seem to have a similar business models to the Underpants Gnomes in Southpark: http://www.youtube.com/watch?v=y-eak9Jz3_k
If only they could work out stage 2, they'd be billionaires.
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