An attempt to put a price on Twitter has got a couple of publications all aflutter. The question arose after an editor at the Wall Street Journal started writing a column about why Twitter was not worth $10 billion but, after a week of investigation, decided that yes, it was.
The findings have produced a response from The Next Web’s Alex Wilhelm, who has argued comprehensively that Dennis K. Birman’s calculations are off, to the tune of about a billion bucks. Twitter is, says TNW, worth around $9 billion.
So let’s have a look at both sides. The WSJ’s argument is that we shouldn’t be looking at what Twitter’s revenue is now, but rather what it will become. Berman quotes analyst estimates for profit margin and revenue but adds that these are conservative and, in reality, Twitter will make much, much more.
Wilhelm, on the other hand, accuses much of the WSJ’s reasoning as being “conjecture” and says that Berman has his methodology wrong, that he is guilty of “overzealous rounding up,” and that, if Berman had done his math correctly, while still massaging the numbers, Twitter would barely be worth $10 billion in 2015.
Until Twitter actually does announce that it’s going for an IPO, expect it to be silly season when it comes to the firm’s actual worth. Last month, it was rumored that Twitter’s IPO would be taking place in 2014, with the same report pegging the firm’s worth at $11 billion.
Is it even worth trying to put a value on a company like Twitter? Or is this speculation all part of the pre-IPO fun? What is the site worth to you? Answers in as many characters as you wish in the comments, please.
[Image by Flickr user clasesdeperiodismo]