Peter Kafka

Recent Posts by Peter Kafka

Twitter’s Astonishing Hockey Stick

hockey-stickEarlier this year I talked to someone who was an early investor in Twitter and asked him whether the company’s lack of revenue had bothered him when he made the bet.

“No,” he said. “I bet on the hockey stick.”

That is, he was looking at Twitter’s staggering month-over-month growth–which looks like a hockey stick when you plot it on a graph–and assuming that any company that moved that fast had to be worth something, eventually.

That kind of thinking is common during bubbles, and much less so after they burst. But in this case, betting on Twitter’s hockey stick looks like a good wager–especially if you made your bet prior to this year. Because this is what the hockey stick looks like now (click to enlarge):
twitter-hockey-stick
And note that the chart just illustrates U.S. traffic to Twitter, which comScore (SCOR) pegs at 9.3 million unique visitors in March, up 131 percent from February. Factor in international users, and those who use Twitter but never visit the site, and you get to 20 million easily.

I’m going to write many more stories about Twitter (a phenomenon that is itself part of the Twitter story) so we can try to assess exactly what that growth means, whether it makes sense for Google (GOOG) or Microsoft (MSFT) to do a search deal and what Twitter is really worth, later. But unless the Twitter guys really make a hash out of this, my anonymous investor is going to be right: That hockey stick is going to be worth something to someone.

Side note: As popular as Twitter is, most people are still new to it. So here’s a tip: If you don’t want the general public to know that you and many of your coworkers got laid off today, don’t Twitter about it.
twitter-layoff
[Image credit: Mykel Roventine]


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