Getting offered $500 million for a company that doesn't even have a revenue stream would seem like a pretty good deal especially in a bad economy. But it wasn't good enough for the Twitter team who remain confident that no profit is the new profit.

 

Hedge fund mogul and Facebook super investor Peter Thiel recently talked to Business Week about the failed deal. He said that Twitter was not content with the cash-stock combination package offered by Facebook for the micro-blogging site. Twitter prefered an open-market valuation of Facebook stock, a notoriously speculative area that has already caused ruffles with Microsoft. Thiel himself admits offering Facebook stock in these kinds of deals "will either turn out to be a great strategy or a terrible strategy."

As the recession atrophies the value of tech stock, assessing the worth of companies with low or no revenue streams, no matter how high their cosmetic value, will become a trickier issue. Taking the long view may sound like a good idea, but technologies change during economic crises and unless the world is still twittering in two years, that $500 will have looked pretty sweet in retrospect.

Send me your comments, questions and any further ideas you have for redetermining valuation of non-revenue based companies to me at zachary@bigthink.com.