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Twitter and Web 2.0

February 11th, 2009
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profit4Why does a site like Twitter, which is nothing more than a social networking app, get $20 million in funding when they DO NOT HAVE BUSINESS MODEL!!!

I realize the company is worth $1 billion theoretical dollars, but to be alive for 3 years and not generate one dollar in revenue is crazy.

For the love of God, WHY???

thisdayonearth Uncategorized , , ,

  1. Tom Kruk
    February 12th, 2009 at 09:24 | #1
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    It is because they have a huge pool of people (members) that can theoretically be utilized. Imagine you had a brilliant idea for how to use twitter and wanted to buy it. This is the estimate of what it would cost. It doesnt reflect real world hard calculations just a theoretical worth, if for example that technology was leased, or adds were to appear. I think having a vehicle that is used by such a huge number of users is “potentially” valuable to a venture capitalist.

    BTW: Are you on Twitter. Follow me @tomkruk :)

  2. thisdayonearth
    February 12th, 2009 at 09:29 | #2
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    @Tom Kruk

    So basically what you are saying is that every company is waiting to bought by Google?

  3. Tom Kruk
    February 12th, 2009 at 12:31 | #3
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    @thisdayonearth
    LOL… Possibly. I think this is why you haven’t seen a profitable model. The trend seems to be 1. Set up a popular entity, 2. Get an incredible amount of users, 3. Sell it for a lot of money.

    If you remember what happened to flickr and del.icio.us … why not twitter?

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