In a matter of months, Twitter’s apparent valuation has climbed from $4 billion to $10 billion, as the company enters into low-level acquisition talks and reveals some of its financials. But is it really possible that Twitter has grown by $6 billion since December?
Commentators found it hard to believe that Twitter was valued at nearly $4 billion in December 2010, when it received a valuation and subsequent investment from Kleiner Perkins (although we thought there was some merit to that number). Now, the Wall Street Journal has revealed inside information that suggests that Twitter is being valued at between $8 and $10 billion.
These new numbers come from apparent low-level talks with Facebook, Google and others who were eying the company over the past few months. While nothing substantial happened as a results of the talks, they did unveil some of Twitter’s usually undercover financials.
Twitter’s revenue was $45 million in 2010. We already knew that, as eMarketer used this figure to determine that Twitter would see $150 million in revenue in 2011. However, the Wall Street Journal article suggests that Twitter’s revenue will be closer to $100-$110 million this year.
The article also reveals that Twitter is going full-steam ahead with its advertising products – Promoted Tweets, Trends and Accounts – in the coming months. Apparently, Promoted Trends sell out every day, which indicates that companies see the value in advertising on Twitter. The president of global sales, Adam Bain, has built a sales team of more than 20 individuals: a sizable chunk of the company’s approximately 350 total employees.
While a $10 billion valuation might sound astronomical to some, it is likely, at least in part, a mechanism for Twitter to remain an independent company and continue to grow on its own.