Saturday, April 16, 2011

Is Twitter worth $10 billion? John Dvorak's Second Opinion - MarketWatch

BERKELEY, Calif. (MarketWatch) — There has been a slew of rumors that Twitter Inc. turned down a $10 billion offer from Google Inc. to acquire the microblogging site. Among the rationales for the high valuation is that Twitter, like Facebook Inc., is an important social-networking tool.

First of all, Twitter is really a messaging service with various uses, and only a few uses remotely impinge on Facebook. In addition, there is no clear major revenue model for Twitter, and it’s doubtful that Google /quotes/comstock/15*!goog/quotes/nls/goog GOOG -8.26%  will be able to change that.

When you sign up for Twitter, you seek to create a network of people with which you can exchange messages. You also follow others you hope will provide you with links or insight about certain topics.

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