What’s Twitter Worth?

Despite Rumors, Twitter's Not for Sale. But What Would It Fetch If It Were?

A month ago, it was Google and Microsoft that were rumored to be in serious talks to buy Twitter, the micro-blogging site that has plenty of users, but no real business plan. This week, Twitter's rumored suitor was Apple — at least until Twitter co-founder Biz Stone told Barbara Walters, "No. We are not for sale." Stone was appearing with Twitter's other co-founder, Evan Williams, on Walters' daytime talk show, The View.

But what would Twitter be worth if it were for sale? PaidContent.org tried to figure that out by looking at user-based multiples from sales of other low-revenue web sites, and offered these examples: YouTube was bought by Google for about $16 per user. News Corp. bought MySpace for $21 per user. Bebo was sold to AOL for $35 per user. So, if you applied its user base of about 19 million to that range of numbers, Twitter might fetch $304 million to $665 million. Twitter's investors have put about $55 million in the business, according to PaidContent, which pointed out that those lower-range numbers would disappoint the venture capitalists who typically look for a 10-fold return.

So it appears Stone, Williams and their investors would be wise to follow the advice offered by Wharton faculty in the recent Knowledge@Whaton article, "All That Twitters Isn't Gold: A Popular Web Application in Search of a Business Plan." Even though a revenue stream would boost Twitter's value, they suggested, the site should be patient and let its user base grow and take shape. Said Wharton legal studies and business ethics professor Kevin Werbach: "Twitter is right to focus on scaling its service before emphasizing revenues. It has a big opportunity, but only if it can keep and grow a big community of users and developers."