Trade Resources Policy & Opinion If Twitter Went to IPO in 2014, It Would Be Worth $11bn

If Twitter Went to IPO in 2014, It Would Be Worth $11bn

(Pound 6.8bn). So say financial researchers at Greencrest Capital.

While this speculative estimate might be little more than a post-Christmas 'what-if', it nonetheless opens an interesting window into the fortunes of the enduringly popular microblogging site when compared to the still-rocky progress of Facebook, which launched on the stock market in May 2012.

It's all about monetisation, of course. Greencrest partly bases its 2014 estimate on Twitter's recent hirings of ex-Zynga SVP of finance and treasurer, Mike Gupta, and Newsvine (sold to MSNBC.com in 2007) founder Mike Davidson. The reading here is that such financially-minded personnel are working on helping Twitter find even more creative ways to fill the social media moneybox on a daily basis.

Facebook, in comparison, didn't seem to seriously consider monetisation until the IPO had already come and gone. Though launching "sponsored stories" in early 2012, the company didn't even release an iPad app until October 2011, well over a year after the Apple device became ubiquitous.

In September 2012, Zuckerberg admitted Facebook's stock performance had "obviously been disappointing", before noting that "it is really clear from the stats and my own personal intuition that a lot of energy in the ecosystem is going to mobile, not desktop".

Zuckerberg's realisation arguably came around a year too late, but while Facebook's current value of $29.30bn is still trailing behind its already-disappointing IPO value of $38bn, it could at least be said to be riding out the storm to an extent.

Twitter, by the looks of it, will be a different story. Bloomberg estimates that Twitter, which is hugely popular on mobile platforms, will be pulling in $1bn in advertising revenue alone by 2014.

Promoted tweets lie at the centre of this profitability. By ensuring paid content is displayed at the top of everybody's search sessions and trend feeds, Twitter is reassuring its advertising clients that their marketing spiel is being seen. The #WispaGold hashtag, which chocolate company Cadbury introduced via promoted tweets in the run-up to the 2012 Olympics, apparently enjoyed a overnight boost of 116 per cent in positive mentions. A promoted trend run later apparently increased positive mentions by 1,800 per cent. In similar circumstances, LG reported 38 per cent and 30 per cent increased brand engagement in two separate instances of promoted tweets.

These are Twitter's own case studies, of course, but go some way to showing the power of social networking.

While Facebook has to fight to make people click, Twitter can simply drop content at the top of each and every feed. And while Facebook's ham-fisted sponsored material insertion has raised the ire of users who feel betrayed by ‘misuse' of their personal information stores, Twitter has never been concerned with birthdays, tagging or personal message ‘walls'; it's just not the kind of application that people closely link with manipulating huge amounts of their personal information.

 

While Facebook, not to mention Zynga and Groupon, clearly lost out last year on IPOs, creating something of a bad smell around tech company IPOs generally, Twitter has its house comparatively in order. LinkedIn remains 19 per cent higher than its IPO value. It also just so happens to be the only one of these four with a well-imagined monetisation strategy (it's impossible to argue with a simple paid registration service).

Should Twitter go IPO in 2014 - and do so before the rumoured Apple buyout takes place - it could well find itself meeting or beating its pound 6.8bn valuation.

 

Source: http://www.computing.co.uk/ctg/news/2234462/analysis-why-twitter-may-well-be-worthy-of-a-gbp68bn-ipo-valuation
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Analysis: Why Twitter May Well Be Worthy of a Pound 6.8bn IPO Valuation