Thats tough. Youve all seen how Twitter ads work, right?Its that sponsored Tweet that shows up pisses me off,no end. Ive never clicked on a sponsored Tweet. I hope nobody ever does. But thats the way they make their advertising revenues. And thats their strength and their weakness.
Their strength is characters. Their weakness is characters. Thats a strength, because it makes it nice, compact. The weakness is, it cant be your primary advertising. So the way I see it is, even if Twitter succeeds,itll never be Google or a Facebook. Itll be a lesser player. And that led me to use a market share of about %for Twitter, which is still about $ billion.
Heres Perth Property Valuations is company with a half a billion dollars in revenuesright now. And over the next decade, Im assumingits going to go -fold to $ billion. So that gave me half the game. I then have to figure out how much money theywill make once theyre past this growth phase. And there are two big targets here. One is Google, and the other is Facebook. Both are immensely profitable.
Googles margins are about % of revenues. Facebooks are about %. And Facebooks margins are dropping,each year that you watch them. Because as they get bigger, its tougher and tougherto maintain these are immense margins. But I thought I was being optimistic, when I useda % end margin for Twitter. I said, thats what youre shooting for. So Ive got my revenues in year . Ive got my margins in year . I also had to bring in that final piece, which is, thisisnt going to happen by magic. Youre not going to go from half a billion in revenuesto $ billion, without doing something. So I had to estimate how much theywould have to put back into the business,in acquisitions, new technology. Thats a reinvestment Im getting. And Im computing it based on how much their revenues arechanging each year.