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October 18, 2011

Company CEO Says Twitter Is Worth $8 Billion

By Ed Silverstein, TMCnet Contributor

Twitter (News - Alert) is still worth far less than Facebook, but the CEO of the microblogging site announced this week that the company is now valued at an impressive $8 billion, according to media reports.

Twitter CEO Dick Costolo (News - Alert) announced the value this week during the Web 2.0 Summit in San Francisco, Calif.

"Let's just call it an even $8 billion," he said in response to a question, according to a report from the BusinessInsider.

Twitter recently raised $800 million from investors. The funding round was led by Zynga (News - Alert) investor DST Global, BusinessInsider said.

According to media reports, Twitter has over 100 million users. On average, the users send about 250 million Tweets daily.

But not everyone agrees that Twitter is worth $8 billion.

On Aug. 1, 2011, John Talty wrote in the International Business Times that “Twitter has yet to prove it's worth $8 billion dollars.”

“As seen in the past five years or so, large social media Web sites can come and go in the blink of an eye,” reports Talty. “As clearly seen with MySpace (News - Alert), the social media landscape can and will change quickly. If history tells us anything, it's that the shelf life for a social media Web site is incredibly short, though Facebook (News - Alert) has continued to truck along.”

“If recent history has shown us anything, no social media company is unique enough,” Talty added. “Everything can and will be replicated.”

In a related matter, some industry observers are predicting that by the first quarter of 2012 Facebook could be valued at more than $100 billion, TMCnet reported.

Facebook was recently valued at over $80 billion, according to VentureBeat. It had peaked at $87.5 billion, according to SharesPost. That is a huge increase from 2008, when VentureBeat reported Facebook was valued at about $4 billion. In 2009, it was valued at $6.5 billion after Russian investment firm Digital Sky Technologies bought shares of the company. In 2010, Facebook was valued at $12 billion and was $34 billion by the end of 2010. It jumped to $50 billion in value in the beginning of 2011, VentureBeat said. Over the summer Facebook was valued at $70 billion.

Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves
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