Ballmer questions Twitter valuation

 
Elizabeth Fournier
MICROSOFT chief executive Steve Ballmer has questioned the rumoured $10bn (£6.2bn) valuation of Twitter, and suggested that the price will be difficult for a potential buyer to sustain if the site were to go public.

“Nobody has paid $10bn yet for Twitter,” he is reported as saying. “We have a great relationship with them, but the numbers are certainly large – there is no question about that.”

In its most recent fundraising last December, Twitter raised $200m from venture capitalist funds, a deal that valued the company at $3.7bn. The site only introduced advertising last year, but its revenue for 2010 is estimated to be around $45m – a figure that’s predicted to double in 2011.

Ballmer also stressed the difference between Google, which went public in 2004, and the slew of private social media companies such as Facebook and Twitter that have been the subject of so much price speculation.

“The valuations aren’t put to the test every day,” said Ballmer. “So we’ll see what happens.”

Meanwhile Twitter dashboard TweetDeck is believed to be in talks with a view to being taken over by software developer UberMedia that would value it at between $25-30m.

Tweetdeck is based in London’s so-called Silicon roundabout and is one of the largest Twitter-based applications not owned by Twitter itself.

$45m
Revenue This is predicted to rise to $250m by 2012, according to research by eMarketer

222
Multiple The number of times revenue that the $10bn figure values Twitter at

12%
Users Just 12 per cent of internet users use Twitter – Facebook’s figure is 62 per cent

$3.7bn
Latest valuation Calculated when Twitter received $200m in venture funding in December