Twitter’s Valuation, $73.52 an Active User?

This is just an educated guess, as we don’t have confirmation from Twitter, nor has the funding closed.

Rumors are coming in that Twitter may raise another round of capital at valuation of $250mm, quick calculations from my archive of social networking stats show many sources indicate they range from 4-6mm registered users.

Last week, when I visited the smooth Twitter offices in SF, I asked them about official registered users and they commented “they don’t give out those numbers”, as it would benefit others more than them. So, I’ll average it around 5mm total registered users. I trust the HP labs research on Twitter (met with Bernardo two weeks ago) and their data from a significant sample size shows that only 68% of users return.

This would suggest that 3,400,000 actual users, which if you diveded into the supposed valuation of $250mm would result in the active (people who actually return) users actual worth $73.52. Scobleizer suggests it’s $42 but I think it’s near double that –as you have to take into account those that won’t participate.

Could a Twitter user generate this type of value for it’s users over it’s lifetime? Perhaps if they went the consumer route with eCommerce, advertising, or some type of location based marketing. Or, they could supplement this with revenues from the corporate side by supplying brands with services to ethically, delivering services to them that wouldn’t shy away consumers.

This isn’t even close to being correct, as if we truly wanted to be analysts over the valuation, we would have to factor in future growth, market conditions, and whichever monetization routes they intend to go, since we don’t have that data, we’ll leave it at current size of an estimated 3.5mm active users.

51 Replies to “Twitter’s Valuation, $73.52 an Active User?”

  1. Taking a different approach, lets say that the business is valued at 7 times year potential earnings. That leaves a valuation of about 10$ per user or less than 1 per month.

    So in a mixed model of ads, plus premium usage for a fee, or special services for brands, and further potential revenue from apps, maybe its not so much.

    Great discussion!

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