Why Twitter Is Massively Undervalued Compared To Facebook

Editor's note: In this guest post, Naval Ravikant and Adam Rifkin argue why Twitter is undervalued. Naval was an early investor in Twitter and owns Twitter shares; Adam does not. They have not discussed the content of this article with anyone inside Twitter. The views expressed are their own. They can be found on Twitter @naval and @ifindkarma. Twitter was valued at one billion dollars in its last round of financing, but we believe it may in fact be severely undervalued relative to Facebook because Twitter's value proposition is less obvious. Facebook has utterly dominated the definition of the "social graph" to the point that conventional wisdom in Silicon Valley says that they have "already won social." Few analysts seem to notice that the particular definition of "social graph" promulgated by Facebook?people you already know in real life?is not the only possible social graph. In fact, Facebook's future revenue will actually be built on top of another social graph: the social interest graph, aka Pages & Likes. Twitter's social interest graph is potentially a huge cash machine that will lift the company out of the red and into the black . . .

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