Twitter in $11bn mega-valuation

TWITTER has been valued at $11bn ahead of a potential move to take the social network public next year.

The micro-blogging company, which has gone from strength to strength in recent years as questions have been raised about its major competitor Facebook, appears to be lining up for a 2014 initial public offering (IPO), according to analysts at New York advisory firm Greencrest Capital.

The valuation, which is based on unofficial, private trading of Twitter stock, comes after a series of steps from the Silicon Valley firm that suggest it is looking to go public.

Twitter has recently reshuffled its management, appointing former Zynga executive Mike Gupta as chief financial officer. Gupta was part of the team that took Zynga, the online game company, public in 2011.

The company did not comment on IPO plans, but founder and chairman Jack Dorsey has recently said that Twitter will go public when it is ready.

“Many industry observers believe that an IPO is likely in 2014, but the process could begin late this year,” Greencrest’s Max Wolff said.

An IPO could add to the fortune of British entrepreneur Iain Dodsworth, who founded TweetDeck, the third-party Twitter app bought by the firm for £25m in cash and shares in 2011.

The $11bn (£6.8bn) figure follows a fundraising round valuing the firm at $8bn in the summer of 2011.

Investors were less bullish about the firm last summer after Facebook’s disastrous IPO, but Twitter’s valuation has increased following a spectacular year. The social network, which lets users send messages of 140 characters into the public domain, is used by public figures from Barack Obama to the Pope and is estimated to have hit 500m users last year, with more than 10m of those in the UK.

The company has also embarked on measures to make it more attractive to advertisers, such as restricting access to Twitter’s database by other websites and applications.

“In the last year there’s been a wide range of moves around professionalising Twitter, working out the right way to engage with advertisers,” Benedict Evans of researchers Enders Analysis said. “They’ve moved towards being a more grown up company.”

And unlike Facebook, which has faced serious questions about its future since its $100bn IPO in May, Twitter’s potential is far more clear.

“Twitter is simpler and cleaner than Facebook, it doesn’t face the same challenge in working out what the user experience is. It doesn’t face the same questions over whether the business will be disrupted,” Evans added, although he pointed out that it is hard to value Twitter without knowing revenues or user figures.