Twitter worth 1 billion in a year? No, make that 1.5 billion? Only in Silicon Alley.


With apologies to Nate who sounds like a sharp and nice guy….

Today’s “only in the Silly Silicon Alley” post comes from Nate who is a new entrepreneur in residence at Rose and therefore really deserves more respect I suppose, but his idea, parroted over at Silicon Alley Insider sure sounds dumb to me – too dumb in fact to make it through the Silicon *Valley* peer review needed since the most important Twitter folks…live there.    Nate is seriously suggesting that Twitter could be quickly turned into a payment system which would immediately gain widespread use and respect in the tech community and thanks to all that use would give Twitter a valuation of … wait for it …  ON BILLION DOLLARS!  Just a moment, just a moment…. over at his own blog Nate’s making that valuation 1.5 billion.   Hey, what’s half a billion in the bubble economy, anyway?

The idea is, I suppose, OK as an out of the box thinking experiment, and it’s true people would jump from PayPal in a New York Minute because they are so usurous with fees, but I think it’s dumb for about a billion reasons.   Here are 3.5 of them:

* Nobody trusts Twitter to stay up, let alone handle their money, protect their checking accounts and credit cards, etc.

* Nobody sends a few bucks here and there very often –

* C’mon Nate, you can’t develop a billion dollar website 1.5 billion dollar website based on people sending a few bucks back and forth.

* The short symbolic chatter at Twitter will not be a comfortable way for most people to send money, even those that *are comfortable with* symbolic chatter.    Moving money is important and you want some checks and balances on your own quick activity.   Paypal has it’s problems, but it’s secure and intuitive for most transactions (though not all – I’d be thrilled to see some competition from Google checkout in this space).

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About JoeDuck

Internet Travel Guy, Father of 2, small town Oregon life. BS Botany from UW Madison Wisconsin, MS Social Sciences from Southern Oregon. Top interests outside of my family's well being are: Internet Technology, Online Travel, Globalization, China, Table Tennis, Real Estate, The Singularity.
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7 Responses to Twitter worth 1 billion in a year? No, make that 1.5 billion? Only in Silicon Alley.

  1. I have to agree 110% that Twitter is too busy putting up the whale to even be taken seriously anymore even for what it was intended to do let alone sending money. Craziness.

    On Plurk, though, maybe. Plurk is like crack that can get you to do almost anything for karma.

  2. FoolsGold says:

    >Twitter should take full advantage of their messaging platform…
    Translation: They ain’t done it and they ain’t a gonna do it, but I still think that they ‘should’ do it ’cause I think its a really nifty idea but Twitter is full of nitwits who don’t follow my ideas.

    >Last year, I wrote an analysis about mobile payments…
    Translation: People ignored me last year and they are still ignoring me. Those twits at Twitter don’t want a mobile payments income stream.

  3. Peter Parker says:

    ————————————————
    Dave Winer, father of RSS says “Twitter, as it was conceived, was never meant to live.”

    “It’s very possible with better engineering its architecture might have gone on for a few more years, but eventually it would have hit this wall, where there were too many people posting too many twits to too many followers. The scale of the system as conceived rises exponentially.”

    So is the end of Twitter getting near? I hope not. Twitter I hope that you are listening and you better start taking things more seriously.
    ———————————————–

    Here’s my two cents.

    For instance there are about 100m users of yahoo messenger and usually 2-3 of them talk at a time that means scalability of 300m conversations. On the other hand with 100m twitter users who usually send messages to 100-10,000 other users the scalability required is 10,000m to 10^6m I have never known any current architecture based on webservers to handle such a scale. So according to me Twitter was never meant to live. It is like a concept car that will never see production. Users of twitter don’t understand this and they don’t care.
    They don’t know whats happening when the website is down. The sad part is that the best analysts claim that Twitter is a billion dollar company in one year of operations. There is an old saying before the days of when people understood permutation combinations. One peasant asked a king to give him rice equal to the total amount gotten by placing double the number of rice grains on a chess square than the previous square, starting with one rice grain. There are 8×8=64 squares. We seriously need to visit grade 7 mathematics.

    I know of only one News/Messaging system that supports around 1 billion users sending messages to all 1 billion users each. Thats a scalability of 10^12m. It is not Web based but rather on a massively scalable serverless P2P architecture based. The team is soft spoken and when I last talked to them I was told that they don’t care about money or hype or fame but rather for just the passion of next generation global systems that will stand the test of worldwide use. Its called Mermaid News Mermaid

    They have other softwares too but this post is about Twitter and Messaging. Once everyone comprehends basic mathematics that goes behind scalable algorithms they would go past the flashy screen and hype to actually want a system they can trust. To the analysts I would say it is easy to create a business plan, create a hype and raise $20m funding it is far more difficult to create something of use.

  4. FoolsGold says:

    Perhaps a business plan and hype is sufficient as a reward?

    Would Twitter ‘scale’ if there were frequent administrative inquiries about “Do you want this creep following you still” or “overuse of Twitter causes delays”?

  5. JoeDuck says:

    Maggie I think you have coined a great new techie phrase only insiders will have a clue about:

    “You putting up the Whale again?”

    Peter Parker: Really interesting comment, though my understanding is that there are shortcuts to solve those problems. Scoble was addressing this a month or so ago. Facebook and Myspace must be dealing with this, right? I’d think one approach would be to reduce the amount of notifications – ie if I twitter you the system logs this at your account and mine, but you have to log on to your account to find out about that rather than be notified immediately.

    FoolsGold: business plan and hype is sufficient

    Ha – in Web 2.0 business you can even delete the business plan from that equation. Although Twitter is substance not hype, their scaling challenges

  6. FoolsGold says:

    One post, in asserting that Twitter could be worth zero in a year, fails to directly challenge the One Billion figure.

    “…It’s time to wake up and get to work, Twitter. Your users are losing patience and unless you want to see them all move to FriendFeed, you better get to work before it’s too late. Trust me, time is running out…”
    This plea for Twitter to take action concerning Downtime suggests that frustrated users will flea to FriendFeed or Pownce or something, but I wonder if sheer frustration at scalability-related reliability issues is required to provoke a mass migration. I wonder if a mere rumor of such a mass migration might not provoke one. What loyalty is there? If there are any number of “trendy, in-spots” won’t any one do? Twitter was first and has some real cutesy names but thats not much of a basis for establishing customer loyalty. If the service is unreliable due to downtime, frustrated users will depart. Perhaps they will leave with regret, perhaps not…but they will leave.

    I wonder however if anyone really wants a ‘live twittering feed’ during an event. Just how many twitters would one really want to receive during some conference or sporting event? The poster who asserted the possiblity of Twitter being worth zero felt that live twittering capability was important. I think the whole purpose of Twitter was to simply give the Calvin Coolidge version of events. You don’t twitter all during the sermon, you give the Calvin Coolidge comment “The sermon was about sin; the minister was against it”. How many people really want to receive a constant stream of tweets anyway?

  7. Three years on and some analysts say Twitter could be worth as much as $5 billion.

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