The History of Twitter’s Valuation

LThe History of Twitter's Valuation Kevin Rose Founder of Digg Ron Conway One of the first investors in Google Marc Andreessen Co-Founder of Netscape Chairman of Ning Dick Costolo Founded Feedburner Tim Ferriss Chris Sacca Naval Ravikant Chairman of Vast Author Public speaker Manages a portfolio of technology start-ups Total ($162.07 Million USD) Spark Capital, Benchmark Capital, Вezos Expeditions, Digital Garage, Digital Garage, Union Square Spark Capital Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, Morgan Stanley Institutional Venture Partners, Union Square, Funding A. 1500 1200 900 600 300 Twitter O Acquisitions Twitter acquires Values of n Twitter acquires Summize Twitter acquires Mixer Labs REVENUE MODEL Twitter monetizes its traffic by serving advertisements: Promoted Tweets aren't guaranteed top views. Twitter will pull the advertisement if metrics show its users aren't interested. Advertising partners include Best Buy, Virgin America, Starbucks, and Bravo. The ad system displays ads based on search keywords. Advertisers are initially paying on a cost per Promoted Tweets are shown at the top of search result pages (with small text to indi- cate it's a sponsored message). thousand views (CPM) basis. Twitter will adjust the pricing model upon review. Only one ad is shown at a time. Twitter also validated rumors of deals worth "several million dollars" by partnering with Bing and Google in 2009. Both search engines now include public tweets in their search results. Bing also provides a standalone Twitter search service. COMPARATIVE VALUATION There's no clear comparable company to Twitter traded publicly. Instead, we've compared several companies in similar categories, with similar operating margins to Twitter. 2010 Google 2011 Yahoo! Baidu Sohu 200,000 150,000 100,000 50,000 5,000 10,000 15,000 20,000 25,000 Enterprise Value in USD (Millions) Estimated Revenues in USD (Millions) Sources: Search Engine Land, Sharespost, TechCrunch Valuation in USD (Millions) ROUNDS ANGEL INVESTORS Mar udy Mar LThe History of Twitter's Valuation Kevin Rose Founder of Digg Ron Conway One of the first investors in Google Marc Andreessen Co-Founder of Netscape Chairman of Ning Dick Costolo Founded Feedburner Tim Ferriss Chris Sacca Naval Ravikant Chairman of Vast Author Public speaker Manages a portfolio of technology start-ups Total ($162.07 Million USD) Spark Capital, Benchmark Capital, Вezos Expeditions, Digital Garage, Digital Garage, Union Square Spark Capital Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, Morgan Stanley Institutional Venture Partners, Union Square, Funding A. 1500 1200 900 600 300 Twitter O Acquisitions Twitter acquires Values of n Twitter acquires Summize Twitter acquires Mixer Labs REVENUE MODEL Twitter monetizes its traffic by serving advertisements: Promoted Tweets aren't guaranteed top views. Twitter will pull the advertisement if metrics show its users aren't interested. Advertising partners include Best Buy, Virgin America, Starbucks, and Bravo. The ad system displays ads based on search keywords. Advertisers are initially paying on a cost per Promoted Tweets are shown at the top of search result pages (with small text to indi- cate it's a sponsored message). thousand views (CPM) basis. Twitter will adjust the pricing model upon review. Only one ad is shown at a time. Twitter also validated rumors of deals worth "several million dollars" by partnering with Bing and Google in 2009. Both search engines now include public tweets in their search results. Bing also provides a standalone Twitter search service. COMPARATIVE VALUATION There's no clear comparable company to Twitter traded publicly. Instead, we've compared several companies in similar categories, with similar operating margins to Twitter. 2010 Google 2011 Yahoo! Baidu Sohu 200,000 150,000 100,000 50,000 5,000 10,000 15,000 20,000 25,000 Enterprise Value in USD (Millions) Estimated Revenues in USD (Millions) Sources: Search Engine Land, Sharespost, TechCrunch Valuation in USD (Millions) ROUNDS ANGEL INVESTORS Mar udy Mar LThe History of Twitter's Valuation Kevin Rose Founder of Digg Ron Conway One of the first investors in Google Marc Andreessen Co-Founder of Netscape Chairman of Ning Dick Costolo Founded Feedburner Tim Ferriss Chris Sacca Naval Ravikant Chairman of Vast Author Public speaker Manages a portfolio of technology start-ups Total ($162.07 Million USD) Spark Capital, Benchmark Capital, Вezos Expeditions, Digital Garage, Digital Garage, Union Square Spark Capital Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, Morgan Stanley Institutional Venture Partners, Union Square, Funding A. 1500 1200 900 600 300 Twitter O Acquisitions Twitter acquires Values of n Twitter acquires Summize Twitter acquires Mixer Labs REVENUE MODEL Twitter monetizes its traffic by serving advertisements: Promoted Tweets aren't guaranteed top views. Twitter will pull the advertisement if metrics show its users aren't interested. Advertising partners include Best Buy, Virgin America, Starbucks, and Bravo. The ad system displays ads based on search keywords. Advertisers are initially paying on a cost per Promoted Tweets are shown at the top of search result pages (with small text to indi- cate it's a sponsored message). thousand views (CPM) basis. Twitter will adjust the pricing model upon review. Only one ad is shown at a time. Twitter also validated rumors of deals worth "several million dollars" by partnering with Bing and Google in 2009. Both search engines now include public tweets in their search results. Bing also provides a standalone Twitter search service. COMPARATIVE VALUATION There's no clear comparable company to Twitter traded publicly. Instead, we've compared several companies in similar categories, with similar operating margins to Twitter. 2010 Google 2011 Yahoo! Baidu Sohu 200,000 150,000 100,000 50,000 5,000 10,000 15,000 20,000 25,000 Enterprise Value in USD (Millions) Estimated Revenues in USD (Millions) Sources: Search Engine Land, Sharespost, TechCrunch Valuation in USD (Millions) ROUNDS ANGEL INVESTORS Mar udy Mar LThe History of Twitter's Valuation Kevin Rose Founder of Digg Ron Conway One of the first investors in Google Marc Andreessen Co-Founder of Netscape Chairman of Ning Dick Costolo Founded Feedburner Tim Ferriss Chris Sacca Naval Ravikant Chairman of Vast Author Public speaker Manages a portfolio of technology start-ups Total ($162.07 Million USD) Spark Capital, Benchmark Capital, Вezos Expeditions, Digital Garage, Digital Garage, Union Square Spark Capital Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, Morgan Stanley Institutional Venture Partners, Union Square, Funding A. 1500 1200 900 600 300 Twitter O Acquisitions Twitter acquires Values of n Twitter acquires Summize Twitter acquires Mixer Labs REVENUE MODEL Twitter monetizes its traffic by serving advertisements: Promoted Tweets aren't guaranteed top views. Twitter will pull the advertisement if metrics show its users aren't interested. Advertising partners include Best Buy, Virgin America, Starbucks, and Bravo. The ad system displays ads based on search keywords. Advertisers are initially paying on a cost per Promoted Tweets are shown at the top of search result pages (with small text to indi- cate it's a sponsored message). thousand views (CPM) basis. Twitter will adjust the pricing model upon review. Only one ad is shown at a time. Twitter also validated rumors of deals worth "several million dollars" by partnering with Bing and Google in 2009. Both search engines now include public tweets in their search results. Bing also provides a standalone Twitter search service. COMPARATIVE VALUATION There's no clear comparable company to Twitter traded publicly. Instead, we've compared several companies in similar categories, with similar operating margins to Twitter. 2010 Google 2011 Yahoo! Baidu Sohu 200,000 150,000 100,000 50,000 5,000 10,000 15,000 20,000 25,000 Enterprise Value in USD (Millions) Estimated Revenues in USD (Millions) Sources: Search Engine Land, Sharespost, TechCrunch Valuation in USD (Millions) ROUNDS ANGEL INVESTORS Mar udy Mar LThe History of Twitter's Valuation Kevin Rose Founder of Digg Ron Conway One of the first investors in Google Marc Andreessen Co-Founder of Netscape Chairman of Ning Dick Costolo Founded Feedburner Tim Ferriss Chris Sacca Naval Ravikant Chairman of Vast Author Public speaker Manages a portfolio of technology start-ups Total ($162.07 Million USD) Spark Capital, Benchmark Capital, Вezos Expeditions, Digital Garage, Digital Garage, Union Square Spark Capital Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, Morgan Stanley Institutional Venture Partners, Union Square, Funding A. 1500 1200 900 600 300 Twitter O Acquisitions Twitter acquires Values of n Twitter acquires Summize Twitter acquires Mixer Labs REVENUE MODEL Twitter monetizes its traffic by serving advertisements: Promoted Tweets aren't guaranteed top views. Twitter will pull the advertisement if metrics show its users aren't interested. Advertising partners include Best Buy, Virgin America, Starbucks, and Bravo. The ad system displays ads based on search keywords. Advertisers are initially paying on a cost per Promoted Tweets are shown at the top of search result pages (with small text to indi- cate it's a sponsored message). thousand views (CPM) basis. Twitter will adjust the pricing model upon review. Only one ad is shown at a time. Twitter also validated rumors of deals worth "several million dollars" by partnering with Bing and Google in 2009. Both search engines now include public tweets in their search results. Bing also provides a standalone Twitter search service. COMPARATIVE VALUATION There's no clear comparable company to Twitter traded publicly. Instead, we've compared several companies in similar categories, with similar operating margins to Twitter. 2010 Google 2011 Yahoo! Baidu Sohu 200,000 150,000 100,000 50,000 5,000 10,000 15,000 20,000 25,000 Enterprise Value in USD (Millions) Estimated Revenues in USD (Millions) Sources: Search Engine Land, Sharespost, TechCrunch Valuation in USD (Millions) ROUNDS ANGEL INVESTORS Mar udy Mar