Whether Twitter is an early stage startup is an interesting question. Maybe
they have peaked– there are certainly some sites that indicate their growth
has flattened (though that might just be a migration from the web to Twitter
clients). To say that there will be no dramatic growth in their future
(when they had dramatic growth as recently as a few months ago) is probably
premature. Clearly a lot of people are betting that there is more magic
that's going to happen there, whether it's growth or monetizing their
existing traffic.

I agree with a lot of what you're saying– if Twitter doesn't change. With
the war chest they have and the talent they've grabbed, my guess is that
they'll be trying a lot of ambitious things in the next 24 months.

Some founders may not be thinking about valuation when they receive early stage investment, but investors are. If they take a 25% stake for $1 million, they're expecting it to sell for at least $4 million when they put their puppy up on the chopping block.

The key word here is “early” stage. They expect growth (or at least hype) to increase valuation.

Twitter is not an early stage startup. They've pretty much peaked. There may be sustained growth, but there will be no more exponential growth in users.

While a revenue stream may eventually appear, no one is really optimistic. That's why you get the disbelief.

Twitter's valuation is now based not on the auction block, but the chopping block. There are existing revenue generating organizations who depend on monopolizing eyeballs. To the extend that Twitter competes with eyeballs, controlling (or eliminating/assimilating) Twitter has value to them.

Online rivals include Facebook (obviously) but also Google and Yahoo. All of which are in a similar situation themselves — being worth more to their revenue generating competitors, who are primarily traditional media. It was no accident that Time-Warner bought AOL or that NewsCorp bought MySpace.

Microsoft is the major non-media major player in the game that is also revenue generating, and they have been trying to get into the media business for a long time. And that is why they are so obsessed with controlling the delivery mechanism.

Whether Twitter is an early stage startup is an interesting question. Maybe
they have peaked– there are certainly some sites that indicate their growth
has flattened (though that might just be a migration from the web to Twitter
clients). To say that there will be no dramatic growth in their future
(when they had dramatic growth as recently as a few months ago) is probably
premature. Clearly a lot of people are betting that there is more magic
that's going to happen there, whether it's growth or monetizing their
existing traffic.

I agree with a lot of what you're saying– if Twitter doesn't change. With
the war chest they have and the talent they've grabbed, my guess is that
they'll be trying a lot of ambitious things in the next 24 months.

Some founders may not be thinking about valuation when they receive early stage investment, but investors are. If they take a 25% stake for $1 million, they're expecting it to sell for at least $4 million when they put their puppy up on the chopping block.

The key word here is “early” stage. They expect growth (or at least hype) to increase valuation.

Twitter is not an early stage startup. They've pretty much peaked. There may be sustained growth, but there will be no more exponential growth in users.

While a revenue stream may eventually appear, no one is really optimistic. That's why you get the disbelief.

Twitter's valuation is now based not on the auction block, but the chopping block. There are existing revenue generating organizations who depend on monopolizing eyeballs. To the extend that Twitter competes with eyeballs, controlling (or eliminating/assimilating) Twitter has value to them.

Online rivals include Facebook (obviously) but also Google and Yahoo. All of which are in a similar situation themselves — being worth more to their revenue generating competitors, who are primarily traditional media. It was no accident that Time-Warner bought AOL or that NewsCorp bought MySpace. Microsoft is the major non-media major player in the game that is also revenue generating, and they have been trying to get into the media business for a long time.