I was surprised by the values placed on two of the hottest closely held companies -- Groupon and Twitter -- both for their sheer size and the fact that Groupon is worth more.
Groupon, a gimmicky coupon site, was valued at 50% more than Twitter, which has become core to the lives and marketing strategies of millions of people.
All Things Digital, the Wall Street Journal-affiliated Web site, is reporting that Google will pay up to $6 billion for Groupon.
And TechCrunch reports that VC giant Kleiner Perkins wants to invest in Twitter at a valuation of $4 billion.
Those are eye-popping numbers -- reportedly ten times Groupon's anticipated revenue this year, and nearly 30 times the Twitter revenue for 2010 that was projected in some stolen documents a year ago.
Groupon has a lot of revenue for a two year old company. But it only has 12 million users, and it already has a lot of competitors. As a happy user of Groupon, I can't differentiate it from the other coupon sites I use like EverSave. Setting up a local couponing site would seem to be easy to do for anyone who can inspire a sales force. Yellow Book salespeople, whose jobs would seem to be in jeopardy now, would seem like obvious competitors.
Twitter has 175 million users and it has a huge role in the social-media zeitgeist. In terms of mindshare it's already the equivalent of Facebook and YouTube. It's going to be very hard for anyone to compete for its niche. Even better micro-blogging technology wouldn't give many people a reason to shift away or add another service.
Obviously, the Groupon valuation is based on real money. Twitter's value is much more conceptual. Still, if I had the opportunity to own 1% of either company, I'd opt for Twitter.
