tag:blogger.com,1999:blog-8152901575140311047.post6357850754203523779..comments2024-03-18T10:18:19.736-04:00Comments on Musings on Markets: What is Twitter worth?Aswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-8152901575140311047.post-23953362789644969132009-11-03T17:59:44.698-05:002009-11-03T17:59:44.698-05:00In any multi-sided business model you have the chi...In any multi-sided business model you have the chicken-and-egg problem, and the importance in this case I believe is to get scale of users generating data to be mined. To charge users for creating data or follow celebrities would be crazy.<br /><br />There are many speculating about future premium versions using a Freemium model, but with or without paid versions I believe there are so many great ways to monetize the Twitter data. Twitter is increasingly becoming a standardized platform for real-time data, now used by actors such as Microsoft and Google, and their search algorithms will probably be updated with algorithms ranking pages on links from Twitter users, RTs by other Twitter users, by the number of followers, by webpages linking to Twitter profiles etc.<br /><br />Content in Twitter messages will probably soon trigger other services. Say that I Twitter about a book that I have read, it would be in the interest of Amazon to ask me to comment the book on Amazon and recommend a new one, in the interest of the writer to get my feedback, in the interest of my local cinema to tell me about when the movie is coming out, and in the interest of mine to know what friends also read the book and who liked it and who didn’t. By cross-referencing twitter messages with past messages, messages by others or from friends in social networks such as Facebook or LinkedIn, there will be great opportunities for interesting services and business models.<br /><br />The key question is how much of the value created that will be captured and controlled by the company, and how much of the value that will be extracted by others mining their data. <br /><br />//Anders<br />The business model databaseAnders Sundelinhttps://www.blogger.com/profile/02704816433435557846noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-31461028693246581372009-10-07T22:25:31.651-04:002009-10-07T22:25:31.651-04:00I don't really think that face book, twitter w...I don't really think that face book, twitter were made with the idea to get users to pay $5 - $10 annual membership, that would be like sitting on the earth and hoping for the moon. What i personally feel is that the large collection of members, their database is of considerable value if used in an appropriate manner. Though it makes sense to view this as an option rather than a conventional investment, however the option here would be if they are able to use the large membership base to their advantage which i think is possible if not easy. Thing of joint ventures between Facebook and other companies making a new products (example a travel company arranging exotic travel around the world) which has more likely hood to generate annual revenues through the members and using this database to advertize their new product to the right people in the data base. The joint venture could then have a contact valuing the database that Facebook has. This would remove legality issuse regarding sale of the database as Facebook would be using the database itself.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-5685553750976898232009-10-04T09:12:56.225-04:002009-10-04T09:12:56.225-04:00Great article. That being said, Twitter users are ...Great article. That being said, Twitter users are nowhere near as valuable as Facebook users. Facebook holds much more information about their member base than Twitter. It's much easier to monetize from Facebook's audience compared to Twitter's.<br /><br />In this market what matters is how much info you know about your user in order to translate that info into needs and send targeted advertisement to them. This is the reason why Google's value is up in the sky. Even though Google doesn't hold half of the information per user a website like Facebook does everyone tells Google exactly what they want.Andre Vitoriohttps://www.blogger.com/profile/10040055994581491957noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-40547538421007175112009-10-02T20:54:18.747-04:002009-10-02T20:54:18.747-04:00A piece we did a while ago on valuation of early-s...A piece we did a while ago on valuation of early-stage companies:<br /><br />http://blog.valuecruncher.com/2007/03/early-stage-valuations-a-venture-capital-approach/<br /><br />And applying a DCF methodology to early-stage companies:<br /><br />http://blog.valuecruncher.com/2007/08/valuecruncher-newsletter-early-stage-valuation-a-dcf-approach/Markhttps://www.blogger.com/profile/04309505955912814065noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-89628882744188149442009-09-29T02:41:52.747-04:002009-09-29T02:41:52.747-04:00its purely relative to Facebook valuation....
Reg...its purely relative to Facebook valuation....<br /><br />Regards,<br />AmarImmortalhttps://www.blogger.com/profile/02889853969712537454noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-90927175649797160872009-09-28T20:00:26.732-04:002009-09-28T20:00:26.732-04:00One of the cofounders of Insight confirms your hun...One of the cofounders of Insight <a href="http://blogs.wsj.com/deals/2009/09/28/meet-twitters-newest-investor-insight-venture-partners/" rel="nofollow">confirms your hunch about how they came up with the valuation</a>:<br /><br />"When we modeled it, we were looking at revenue somewhere between Google and Facebook. Google monetizes at $30 a user and Facebook is about $2 a user."Dennis Chiutenhttps://www.blogger.com/profile/09104932480934696174noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-58379948690695893602009-09-26T13:30:07.190-04:002009-09-26T13:30:07.190-04:00Well if you look at it i am amazed that a search e...Well if you look at it i am amazed that a search engine can have a valuation of USD 150b matching apple, ibm and even microsoft. <br /><br />my question would be if that valuation is translated into per user annual fee than no one would use google. <br /><br />you can compare apples with oranges on basis of their price per kg or taste but what if you have some thing that is not edible and doesn't have any weight!shikhilhttps://www.blogger.com/profile/03246817753443758053noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-12140158218251437492009-09-26T09:39:51.468-04:002009-09-26T09:39:51.468-04:00I am skeptical too, but being skeptical does not w...I am skeptical too, but being skeptical does not wipe out the probability of a breakthrough pricing model delivering huge payoffs. That is why I characterized it as an option rather than a conventional investment.Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-64523746128529003122009-09-26T09:19:03.588-04:002009-09-26T09:19:03.588-04:00http://online.wsj.com/article/SB123335678420235003...http://online.wsj.com/article/SB123335678420235003.html<br /><br />"If you are a Twitterer, the question I would have for you is this: Would you be willing to pay an annual membership fee of $ 5 or $ 10 to follow your favourite celebrities thoughts?"<br /><br />No way.....<br />I can't imagine an internet user paying for any of the services offered on internet like FB, Orkut or Twitter!<br /><br />The argument that the valuation may come from the investors' specific advantage by gaining access to 30 million people, still looks like shooting in the dark. We have already seen enough services like Orkut, FB, Linkedin or Blogger building a huge membership population in a short span of time. If its that easy, the cost of reaching out to such a large population through one medium will only get cheaper (in fact much cheaper considering the pace at which the internet economics keep changing).<br /><br />Just imagine, if one day Wikipedia starts allowing advertisements in its page and decides to use it for some charity purposes or something, wouldn't it completely change the dynamics of the industry?Mahesh Sethuramanhttps://www.blogger.com/profile/01909074683189926487noreply@blogger.com