There has been a lot of talk lately about Twitter and Twitter’s revenue model, or their lack of one. With almost 2 million users Twitter has become a phenomenon (one that I don’t understand) but also one that’s plagued by server failures and downtime.
At the end of May Twitter secured a $15 million investment from Boston based Spark Capital. This capital infusion will surely be used to limit downtime and create some revenues – something even a phenomenon needs. Considering that Twitter loses money for every visitor to the site they need to monetize this application quickly. The very conservative estimate (via Bizak Calculator) computes Twitter loses $0.03 for every visitor – that’s based on a very low $50,000 /month server costs. Costs and loses are more likely double that!
Obviously the Bizak Calculator doesn’t add in the phenom factor when computing valuations!
I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.
Tim Ramsey
[...] earns $9.33 for every person who visits his website. Internet powerhouses like Facebook, YouTube, Twitter, & Myspace wish they had a $9.33 EPV. If BarackObama.com was an internet site making $30 [...]
[...] for Twitter this was one of my favorite examples that I previously wrote about (Twitter Costs). Since Twitter has no revenue model and huge server costs my calculations actually valued them at [...]