Since @jack posted his first tweet seven years ago, Twitter has grown to over 200 million active users and 400 million tweets each day. Twitter has shared in the growing transformation of the way the world communicates.
Is Twitter Really Worth $10 Billion?
Selected excerpts from WSJ article:
• Why Twitter has the potential to match some of the money-gushing properties of the Internet's greatest money gusher, Google Inc.
• "Twitter isn't worth $10 billion if you benchmark it to its current financials. But that hardly matters now. The prime question is just how big Twitter can get—and how profitable."
• "Twitter is collecting an estimated $4 for each of its 200 million-plus monthly active users."
• "Peg that number at $7 per user by 2016, below the rate analysts expect Facebook's revenue to grow"
• "Member number expands to about 500 million"
• "That magic is the value of free labor. The company doesn't have to pay a cent for the 400 million messages sent each day. As with Facebook, the users willingly, voraciously, do the work gratis"
• For simplicity's sake, let's reduce Twitter's net margins to Google's, which are a gusher-like 21%. Value all those earnings at Google's 17-times-trading multiple, and, voilà, Twitter has a value of $12.5 billion. And you needn't tweak conditions much to get a higher number.
Is this relevant for you?
Perhaps not, but the power of scalability are evident.
So you might want to have a lower number of members, but higher revenue for member.
You choose, but you need to understand some powerful lessons to achieve these numbers
1. Give a little bit – you need to give value and satisfaction to attract and keep your members
2. It is not for everyone – One person’s Blackberry is another person’s failed company
3. Understand and keep understanding your members!
4. Listen to your members
6. Be profitable
7. Leave money on the table for good customer service, a good value proposition and to keep the innovation going
Is this for all?
No and the faint of heart need not apply – but let us know if you think it may apply to you!