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Is Money-Losing Twitter Worth a Quarter of a Billion?

Posted Jan 26, 2009 06:16pm EST by Sarah Lacy in Internet, Media, Venture Capital, M and A, IPOs, Recession
Related: GOOG, NWS, ^IXIC

The hot story on the blogs this weekend was the rumored $20 million-plus that hot micro-blogging startup Twitter is raising from venture capitalists. 

What caught people’s attention most was the rumored $250 million valuation for a company without revenues, especially in a market when startups are all racing to cut costs and get to profits fast.

But let's put this in perspective. Last year, other fast-growing Web 2.0 sites easily got valuations north of $500 million. I argue that $250 million does reflect a recessionary valuation for Twitter. My guest Om Malik, founder of GigaOm, says that's only if Twitter is building a platform company like Facebook and MySpace. Either way, we both say Twitter was wise to turn down Facebook’s $500 million entreaty a few months ago. Are more acquisition offers on the way?

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