Is Twitter valuation of $8 to 10 billion just bullshit and hype ??

Recent Wall Street Journal article mentioned that valuation of Twitter may be around $8 to $10 billion
http://online.wsj.com/article/SB100...34543029279426.html?mod=WSJ_hp_LEFTTopStories
That had many analysts falling off their chairs. For a company that is projecting revenues of only $100 million this year, that is huge valuation.
Very likely the high valuation is result of lots of funds available and lots of eager investors and high prices of tech stocks like ebay, Amazon. With their high stock prices, they can effectively "cheaply" buy out companies with their stocks.
Another reason for high valuation is the crazy hype Twitter spins - for a company that makes money from "Pointless babble", that is not surprising. http://en.wikipedia.org/wiki/Twitter#Tweet_contents
What is this world coming to when investors are willing to pay premium prices for pointless rubbish, bullshit?

 

The last injection of funding had them valued at around $4 billion. It's not out of the ordinary for a potential suitor to value them at the $8 billion range.

 

It's 2000 all over again, history does have a tendency to repeat itself. I mean Facebook is valued at around 5/6 THOUSAND times earnings, that it in itself has my alarm bells ringing. I mean all these companies are valued by their earnings projections, but if we take a note out of MySpaces book you'll understand that internet users suffer from SOS shiny object syndrome, which to a commercial enterprise is fatal.

 

Facebook's such evaluation is due to the potential power it might have in the future. It's not just financial power, but political too. If Facebook becomes a 'internet living place' and people become completely dependent to it, Facebook can easily make their own Amazon, their own Ebay, their own everything, within their site, without people having to leave the site. So it's not just advertising Facebook might do in future. All of this is just potential, of course.

Twitter has a similar(although significantly smaller) potential, but they're taking off steadily, first focusing on efficient, and unique type of communication. However, imagine the political power of the people owning Twitter in the time when every single person in the world will use it.

 

No like facebook isn't evaluated at 50 bilion etc etc
This is just marketing crap ...

 

Anyone here remembers lycos, geocities, digg, myspace or hi5? ) Guess what will we add to this list in a not too distant future. FB is quittable, twitter is not replaceable.

 

Oh yeah lol.

This is my fav statement on Wikipedia.

The year 2000, the year common sense just wasn't that common.

 

It really is worth that much but only if we believe it. Think that there are Millions of people on there and think of the advertising revenue that could be generated. Better than Superbowl commercials but this traffic is everyday!

 

IMO The only thing that's worth billions and it's bound to stay on the web is google, anything else that comes as a wave, goes as a wave, like we say in Romania.

 

Twitter and Facebook maybe around forever, the only real problem is nothing is worth an infinite price. There does comes a point where the company becomes over valued, or large stake holders start to sell and the price starts to fall.

 

Well, they're thinking about future profits - so the valuation isn't all the crap, it should be based upon earnings though, and Twitter isn't generating as much as it should with the amount of traffic its getting/

 

You've got it absoloutely bang on there. A well assed judgement.