So, as you may have heard, the word on the street is that there is allegedly a bidding war over Oprah’s favorite micro-blogging website, Twitter. Google and Microsoft are being thrown around as two of the suitors. Now, Twitter’s founders, for their part, have stoked the flames by going on the record saying that they wouldn’t sell for $1 Billion dollars. You read that right. They would not sell it.
So, I gotta ask: what is going on around here? Seriously? Is it 1999 again? Aren’t we in a freaking global economic f*ckstorm? Why are people even entertaining the thought of paying this sort of money for “eyeballs” still? Why are they not worried about things like revenue and profitability?
Most of my favorite sites in the world right now are social media sites, but this is just ridiculous. Google is going to lose $470 million on YouTube, this year alone (according to Slate Magazine). They paid $1.65 billion for the site back in 2006. Recently, Facebook was valued at $15 billion dollars (after Microsoft dumped $150 million into them). Now though, it’s looking like Facebook is being valued at closer to $4 billion (which has them none to pleased). These numbers are all huge, and I don’t get where they are coming from. Where are the revenue streams that will one-day support these businesses? How are they going to make more than they spend? And (let’s make that leap of faith and assume that they will make money one day) once they are making money, how are they going to stay relevant, and profitable, long enough to make up all the money they’ve already lost building the business? Why are we doing exactly what we did in the ‘90s? What’s different?
I have to admit though; I’m shocked that Twitter won’t sell for $1 Billion. If I’m running Twitter, and someone offers me $100 million and a meatball sandwich, that site is sold. Enjoy. Here are the keys, I’ll be on some beach somewhere. But a billion? I’d be looking for Ashton Kutcher and the “Punk’d” cameras. $1 Billion. I’d probably be able to go and buy the Dallas Mavericks then…
Does anyone remember AOL? Friendster? WebVan? Pets.com? Excite@Home? MySpace (whose traffic is down over 11% this year)? This list could go on, I’m just getting warmed up… Just because you have eyeballs now, it doesn’t mean you will in one year, or two. Your “eyeballs” move in a herd… they follow the other people, not the technology or the application. They are not loyal to Facebook or Twitter. Call Chris DeWolfe (MySpace’s CEO) and ask him. If everyone on Facebook started leaving in droves for GiveJackABillionDollars.com tomorrow, they would be gone. For example, do any of you still check your Friendster accounts? They’re called “social” networks for a reason. It’s all about where the people are…
$1 Billion dollars and Twitter would say “no”. Wow. How can you not hear a Homer Simpson-esque “Yoink” as you grab that check and run out the door giggling? That kind of money shouldn’t be offered in the first place, but once it is… how do you leave it on the table? Anyone want www.freetwitterdesigner.com? Not huge traffic numbers, but it got .0036% of the traffic of Twitter in February. If my math is right, that values us at at least $3.6 million. We’d definitely sell it for that. You have my word.
What do you guys think? Am I just not seeing the “bigger picture” here?
$1 Billion? Sheeeeeeeeeeeyit.