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Why Scoble is Over-Hyped and Twitter is Worth $4 Billion, Not A Penny More

failwhaleI wrote a post a few months ago soliloquizing that Twitter is more valuable than Bebo, which was apparently worth $750m at one time.

Now Scoble has announced that he thinks it is worth $5 billion, which is apparently VERY CONTROVERSIAL.  This brings us back to an earlier topic: My blog gets little love and has self-esteem issues.

As always, the pride and joy of this blog is to deep dive on something and then point out all the flaws in our data.  Our starting thesis will be this:

  • Bebo is worth less than $750m
  • Facebook is worth ~$6b – $10b

So here is a ton of numbers and here we go:


So if we are just straight up monetizing pageviews, Twitter is worth a tiny fraction of Facebook and growing more slowly.


Twitter users are less engaged.  Scoble opines at length that people who say this don’t get it.


More of same.


Daily reach says the same thing page views do, and this is actually probably a more interesting metric.


Compete data is basically the same.  Twitter is 25% of Facebook but growing fast.  Bye, bye Bebo.

So what conclusions can one reach from the data:

  • Twitter is growing really fast – this is good (although it is not growing much faster than Facebook – albeit it has a smaller base).
  • Twitter has little or no monetization model – this makes it hard for an M&A function to value it – although this could result in making up numbers, which is something M&A functions tend to do a good job of exaggerating – let us say this increases the value.
  • Twitter is 25% of Facebooks size, any way you slice it.

So from this, one could conclude that if Facebook is valued at $8b, Twitter could be worth $4b.  I am ready to give it a $2b premium over the “25% of Facebook” valuation that I would have assigned it by wrote.  The $2b also feels not inappropriate given that it is almost definitely worth 5x Bebo today, so the markup makes it worth 10x.  10x Bebo today feels reasonable to me.

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