If Twitter's Worth $10 Billion, Facebook Is Worth $100 Billion

Robert Scoble wrote a late night post over the weekend which suggests Twitter is worth between $5 and $10 billion dollars based on a sampling of businesses in approximately 8 cities. What sort of math was used to deduce this valuation? Absolutely none, but if you want to purchase shares at such a ridiculous valuation, Howard Lindzon will sell shares to you. Scoble’s post simultaneously hypes the already bloated Twitter bubble while making jabs at Facebook.

Back in March, Robert Scoble was saying the exact opposite. Scoble is pretty good at writing a headline which will drive a lot of page views but not as good at developing a rational argument. Here is this week’s justification for why Facebook is screwed according to Scoble:

1. Facebook doesn’t have a way for you to track all mentions of your business. On Twitter if you write “@scobleizer” I will see it and be able to answer it. Facebook doesn’t have anything like that.

2. Facebook has even less permanence than Twitter does and that’s a low bar to crawl under (Tweets are only accessible for a few days on Twitter Search, while on Facebook once they roll off your home page they are nearly impossible to find).

3. Facebook has brand troubles. Most people like Facebook for its private features (my wife can send me and a select group of friends our baby photos, for instance but the newer public features, like fan pages, are misunderstood). If I were Mark Zuckerberg I would split these two usage models into two: one usage model that’s kept behind the privacy walls. Another that I would call “Facebook Public” that would be all the totally public features, including search and APIs.

His first statement is flat out inaccurate. The new Facebook search will let you track all those individuals that have said something publicly about your company. Twitter enables privacy as well, the only difference is that with Twitter, privacy is not a granular thing, it’s binary … simply “yes” or “no”. Scoble’s second argument that Facebook status updates aren’t present after they roll off the homepage is also inaccurate since Facebook search enables users to find previous feed stories.

The third argument however is a bit more complex and one that could be accurate. I’ve written obsessively about how granular settings could in fact be Facebook’s weakness but as we’re seeing with new privacy investigations by government agencies, granular settings aren’t optional, they’ll become a fact of life. If Twitter wants to have any user data eventually integrated into their API they’ll also have to deal with this.

The Valuation Game Is Watercooler Chatter

It’s fun to play the valuation game but honestly, it means nothing without some sort of rational understanding of both companies’ revenue and business models. While Robert Scoble may have sampled a few companies, I can point to countless doctors, dentists, and lawyers that are getting nothing out of Twitter but a ton of value from Facebook. I’m sure you can find people that will tell you both but if you are advising companies what to do, you should tell them to go where the conversation is and where their customers are.

Do businesses have customers that are highly active on Facebook? If the customers are internet users, then there’s a good chance they’re on Facebook. Do your customers have Twitter accounts that they regularly monitor? Possibly, but not a guarantee. If they’re on Twitter … great! By the way, Facebook’s trying to kill the debate between the two companies if you weren’t paying attention. Honestly, that’s probably the best way to go.

Declaring Twitter so much more valuable for businesses is absolutely ridiculous though. Your customers are on Facebook AND you can advertise to them as well on there. Anything that suggests otherwise is absolutely ridiculous at this point.

Recommended articles