From 140 Characters To IPO?

According to people close to the plans, Twitter is going to introduce advertisements among the tweets that users see in the most active part of Twitter. As Twitter tries to generate revenue and become a profitable company, this is a new way for the social networking company to generate profits. Twitter has not been as effective as monetizing its user base as Facebook has, and that is a definite precursor to any IPO that the company may do down the road. Twitter has also been discussing doing a Groupon-like feature, which would have specific deals for a specific time in a tweet. Another potential option is the ability to pre-schedule tweets from advertisers. There are reports that Twitter will generate $100 million in revenue this year, and other reports that Twitter has a valuation of $8 to $10 billion. Rumors came earlier this year that Google GOOG tried to buy them, but to no avail. There were rumors earlier this year that J.P. Morgan had invested in Twitter, after Goldman Sachs invested in Facebook at a $50 billion valuation. If Twitter is able to generate significant revenue from these measures, then the $10 billion valuation may not look expensive at all. In fact, it may look cheap. At $100 million in revenues this year, Twitter is going for about 10 times revenues, which is not horrible expensive for a company that is growing as fast as Twitter is. Not too bad for 140 characters.