Billion Dollar Baby

It’s less than four years old, something like 40% of new sign-ups to it don’t last longer than a month before wandering away and it hasn’t generated a red cent in revenues. And yet last Friday, venture capitalists invested a reported $100 million into Twitter, effectively valuing the fledgeling company at $1bn – more than General Motors was worth when it went bust.

Another way of looking at it would be to value every single tweet ever tweeted at $1 - Twitter recently went past the billion tweet barrier.

With something like 54 million visitors a month and a goal, according to documents leaked to TechCrunch, of netting a billion users by 2013, Twitter certainly captures a lot of eyeballs. That billion user figure isn't ridiculous, BTW - Twitter's already smashed its own growth targets. And it’s eyeballs that make all the difference in today’s Adword world – Google's annual revenues of $21bn-odd are made up in the vast majority of clicks – each netting a few cents. Those revenues, to put them into perspective, are worth something like a sixth of global annual television advertising revenue and are also equivalent to total US print advertising spending - the latter falling as fast as Internet advertising spend is rising.

With much speculation as to how Twitter is actually going to make any money, some form of advertising is top of most pundits’ agendas. The documents leaked to TechCrunch appear to show that Twitter isn’t really quite sure what to do with the goose it has found itself holding. And despite that goose never having laid an egg, some smart money is betting that when it does, it’ll be gold.

What makes Twitter neat is that its open APIs mean that lots of smart people are dreaming up new ways to use all those eyeballs – there’s a long list of things you can do with Twitter that don’t actually involve Tweeting at all. You can share files, music, pictures, video or links, even make payments - that last link is a service called TwitPay that lets you link your PayPal account with Twitter, which means you can now buy and sell stuff with a Tweet.

So Twitter is becoming a sort of central switch for people who are talking and sharing stuff, a way of flagging up the availability of news, information and content. And, in fact, that's how many of us are now using Twitter - to share information, links and stuff we find interesting.

The stuff itself isn't on Twitter - but Twitter is how we send the signal to go get it.

And that's where Google came out of absolutely nowhere to become a world-straddling colossus. Nothing we want is on Google - it's where we go to find it.

Which is why I think Twitter could be as big as Google and why I think the smart money is being, well, smart...

PS: I know, I know. To be honest, I'm not really a rabid Twitter evangelist. I just look and sound like one. It'll pass.