Quite how much Twitter is worth is a difficult question in one sense. So much of it depends upon how the business expands its number of users, how it manages to monetise that greater number and so on. There’s an awful lot of potential there, to be sure, but is it really worth $9 billion?

A short and not very helpful answer is that of course it’s worth $9 billion. It’s just had a round of private transactions and that round valued the company at $9 billion. Things in a market based economy are worth what people are willing to pay for them: people paid at the $9 billion valuation therefore Twitter is worth $9 billion. Quod erat demonstrandum and all that.

Over in the WSJ they have a look at other measurements, other ways of trying to divine the value of Twitter:

Today, with a relatively immature set of products, Twitter is collecting an estimated $4 for each of its 200 million-plus monthly active users. Ad budgets are moving increasingly to social outletsa secular shift that should easily push this number higher. Being conservative, let’s peg that number at $7 per user by 2016, below the rate analysts expect Facebook’s revenue to grow.

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Read also:

WSJ Tried To Prove Twitter Wasn't Worth $ 10 Billion, But 'Facts Intervened' (Business Insider)

Is Twitter Worth $ 10 Billion? Yes. And No. (Fast Company)

The Known, Unknown, and Unknowable of Twitter's $ 10 Billion Valuation (The Atlantic Wire)

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