Twitter valued at $1 Billion say people with a vested interest in Twitter

Hysterical story in today’s journal headlined: Twitter’s Value Is Set at $1 Billion

The lede:

Twitter Inc. is nearing a deal for as much as $100 million in new funding that would buy the fast-growing Internet-messaging company more time to figure out its business model, according to people familiar with the situation.

But the punch line comes in the 3rd graph:

The investors are valuing Twitter – which has yet to generate more than a trickle of revenues – at more than $1 billion, according to people familiar with the plan. That’s more than triple the valuation Twitter received during its last round of capital raising in February, underscoring how quickly the company has grown.

So let me see if I understand, the companies who are giving $100M to Twitter say Twitter is worth more than 10 times that amount. Hmmm. Well they are certainly an unbiased source.

By the way, CollateralDamage.biz is worth more than $10 million so you should want to buy it while the price is still this low, say people familiar with my bank account.

So we now know it takes about 10 years to forget the lessons of a bubble burst. Remember the .com bubble?

Anyone?

Bueller?

Companies with no way to generate actual money were suddenly worth absurd amounts because … well … because. As far as I can tell Twitter’s business model is to be bought by Google. To date Twitter has proven to be a very popular supplementary application. People use Twitter and all there other methods of communicating. It isn’t supplanting either email or blogs AND (this is big) it is NOT popular with the teens to 20s demographic, which means it doesn’t have a future.

UPDATE!

This just got added to the WSJ site:

SAN FRANCISCO (Dow Jones)–Micro-blogging service Twitter Inc. said Friday it had closed a "significant round of funding," a deal that will give the wildly-popular startup more time to develop a business model.” Twtter said investors included Insight Venture Partners, T. Rowe Price (TROW), Institutional Venture Partners, Spark Capital and Benchmark Capital.

There’s gotta be a pony in there somewhere, right guys? Hey, anyone seen my Kozmo.com messenger bag?

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