This is when Twitter will pull in more than a billion dollars

eMarketer pegs Twitter’s revenue at $400 mn in 2013, but the explosive growth isn’t expected to stop there.The latest from VentureBeat indicates a revenue target of $1.19 bn five years from now. For 2011, the forecast is $140 mn in revenue – small compared to Facebook’s projected $4.27 bn, but the company isn’t likely as close to a liquidity event.

Of course, there’s a reason for this. VentureBeat reports:

However, we have to remember that the microblogging platform’s revenue-generating suite of ad products hasn’t even been fully rolled out yet. Saying the company’s revenue efforts are still in a “nascent stage,” secondary market SharesPost researchers stated, “We believe the company is still a year or two from fully monetizing all aspects of its platform.”

Simply put, Twitter won’t generate big bucks until its suite of advertising products is fully developed. Last year, the social media company was good for revenues of $45 mn.

So, what will Twitter be worth when it breaks the billion-dollar mark?

As for valuation, the report reads, “Assuming steady state revenues of $1.195B in 2016, normalized net margins of 25 per cent, a growth multiple of 25x, and discounting to 2011 at a discount rate of 20 per cent, we arrive at a target 2011 enterprise value of $3.0B. Accounting for estimated cash in hand of $600M we arrive at a market capitalisation of $3.6B.”

That’s a lot lower than the company’s recent implied valuation of $8 bn, not to mention its secondary market trading implied valuation of $6.8 bn.

Source: VentureBeat

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