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Twitter’s value expected to reach $7 billion


Twitter’s value expected to reach $7 billion

Kelly MacNeil July 6, 2011

As Twitter continues to approach private investors and many people feel they're gearing up to go public, new estimates are coming out about how much he popular social media website is worth. According to The Wall Street Journal, after meeting with its latest round of investors, Twitter's value could be upwards of $7 billion.

The move comes soon after Twitter raised around $200 million several months ago to boost its value to $3.7 billion. Industry analysts say that Twitter may be delaying going public so that it can develop a more substantial advertising base. This is a move that experts say makes a lot of sense, since it currently lags behind in that capacity when compared to other social-based websites like Facebook and Groupon.

"Twitter is still evolving its business model," Tony Florence, a partner with venture capital firm New Enterprise Associates, told the Journal. "Staying private while you are figuring out your model makes a lot of sense."

Currently, Twitter allows users to share everything from random thoughts to important news stories. One of its main sources of advertising revenue is called the promoted tweet, which companies can purchase so that it shows upon users' main accounts. The tactic appears to be working – Twitter is expected to enjoy about $150 million in ad revenue for 2011.

In terms of a user base, Twitter is rapidly growing as well. The news source reports that it saw around 139 million unique users worldwide in May, a substantial jump from the 90 million it saw just one year earlier. As for the states, Twitter is rising in popularity, albeit at a somewhat slower pace.