BusinessWeek Logo

Could Twitter be worth a billion BusinessWeeks?

Posted by: Stephen Baker on September 16

I read on TechCrunch that Twitter’s latest round of funding values the company at $1 billion. This leads me to wonder about the widening valuation gap between new and old media.

I am not one to denigrate Twitter. I use it, enjoy it, and wrote a piece more than a year ago entitled “Why Twitter Matters.”

But think about this: Twitter is still hunting for revenue and a business model, and it’s valued at $1 billion. BusinessWeek, even during a massive adverting recession, has estimated ad revenues this year of $80.5 million, a quarter of it from online. I have no idea how much McGraw-Hill will fetch for BW in the sale, which is supposed to conclude within weeks. But at least one estimate has been as low as $1.

To be fair, BW is losing as much as $60 million this year. And Twitter, conceivably, could continue to grow, becoming an enduring global platform for communication and search. But by the same logic that drives bottom-feeders like Wilbur Ross to buy companies like Bethlehem Steel, the gap between Twitter’s valuation and BW’s might well narrow.

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/

Reader Comments

Jennifer M.

September 19, 2009 12:26 PM

Actually I am curious. I have read dozens of articles (and blogs) over the past several weeks about Social Media. Given that this 'information age' we live in is constantly evolving, I am curious as to your view on how long this 'social media' frenzy might actually last. Does it have long term potential or is really like everyhting else and it will slowly fizzle out over the next few years?

Digital Don

October 1, 2009 02:49 PM

"Could Twitter be worth a billion BusinessWeeks?"

No, but only because humankind seems to be unable to learn from our past mistakes and continues to over value the "buzz of the week."

Twitter is the CB Radio of the 00s.

Pat O'Brian

October 6, 2009 07:37 AM

I think of Twitter as akin to a conversation. There are few conversations that we retain in memory. Most are simple interactions without real long term value.

If Twitter gives voice to conversation generally, then it does have value. But it's a voice in competition with other ways to express throw away thoughts and observations. So as a platform I don't see the 'value add' in Twitter to the average person.

BW and the insights it offers has a 'longer tail' in its value. The information provided degrades, but not a instantaneously as Tweets.

The observation is apt. The valuation of each is out of proportion when looked at from the view of content. But what about as a revenue earner? I guess my view is that neither is worth all that much. BW ought to be worth something more than $1, but it depends upon managing the business as a business, and finding value for the investor and advertisers.

Perhaps the days of a weekly paper based mailing are over. That's just not the format in this new cyberspace world. Without that handicap, and a renewed need for real and accurate information, can't a new model be found? Isn't that the value proposition for your customers?

Real investigative reporting of matters (business related or other matters) is going to be increasing needed and in demand at some point, as all news venues are falling.

patrice mcpherson

October 26, 2009 08:22 PM

I think twitter is like any other social network,its a competion of rank and status.what social network will they come up with next;and will it generate as revanue as the rest.

Post a comment

 

About

In Blogspotting Senior Writer Stephen Baker and Associate Editor Heather Green take a look at how cutting-edge technologies are changing business and society. Whether its blogs or wikis, data crunching or data targeting, technology’s advances are reshaping the world that we live in.

RSS Feed: Blogspotting

BW Mall - Sponsored Links