So which is the 10th company? Twitter! The world’s favourite microblogging site is all set to launch its IPO in early 2014 (or last quarter of 2013) with an expected valuation of 10-15 billion USD according to various reports. It’s revenue in 2012 is expected to be about 260 million USD, so we are essentially considering a revenue multiple of 40-60 at these levels of valuation. With over 100 million users, Twitter in fact leads Facebook as Japan’s largest social network! It is extremely difficult to value a company like Twitter owing to its business model as one cannot be certain about its revenue growth trajectory. Can advertisers convey their message in 140 characters? Will they tweet directly to the users? Are trending topics and hashtags, Twitter’s answer to Facebook likes and Google’s AdSense? Online company valuations have another unique problem as we are essentially trying to value an entity that has no physical assets (it might own but we are technically valuing just the website!). Furthermore, it is more risky from an investor point of view as a new better alternative might emerge (much sooner than in case of normal brick and mortar entities) which can eat up this website’s visitor hits and market share. Is revenue multiple the only valid approach for valuing a firm like Twitter as comparable approach will not work due to the uniqueness of the business model? But even then, revenue multiple figure might vary based on the expectation of the market without reflecting the intrinsic value. Twitter on its part is working hard to transform itself into a news update service and not just another social media network, which will makes its business model even more differentiated. While these questions remain unanswered, this IPO will definitely be tracked by many world-wide. Will Twitter head the Zynga way or outperform like Linkedin? This perhaps is the factor that investors should consider rather than delving into pure numbers.