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Investors say Twitter is worth $3.7 billion

A laptop user visits the Twitter homepage.

TEXT OF INTERVIEW

JEREMY HOBSON: Whether you use Twitter or not you probably know the concept. Users send out short messages all day long and follow the people they're interested in. Well, today that simple concept has a much higher value than it did before. Investors now say Twitter is worth $3.7 billion.

Marketplace's Janet Babin is here with me in New York with more. Good morning, Janet.

JANET BABIN: Good morning Jeremy.

HOBSON: How do we know the company is worth that much?

BABIN: Kleiner Perkins Caufield and Byers, the VC firm paid $200 million for a piece of Twitter. If you take this investment, and factor in all those made in the past, the math works out to Twitter being valued at $3.7 billion as you said. Last year Twitter was valued at around a billion dollars. So what this means is that Twitter is now its worth even more to investors. What's interesting is that VC firm that just made this investment -- Kleiner Perkins -i it's legendary for early investments in Google and Amazon, but it had initially passed on Twitter. Maybe the decision to go there now has to do with VC firm's addition of Morgan Stanley Internet analyst Mary Meeker -- she became famous during the dot-com boom and she was hailed as a talent infusion for Kleiner Perkins.

HOBSON: So they finally see some value in Twitter. The same question comes up with all these tech companies: when are they going to make money? Do we know anymore about Twitter's plans on that front today?

BABIN: Twitter is still trying to figure that out. Analysts estimate the company has made about $100 million. Twitter has some ideas about how it could get some revenue. It could include ads in search-result pages or start offering e-commerce pages. It did recently add a premium user services for businesses. And it has recently monetized search -- so stream of Tweets do show up now on Google and Yahoo searches.

HOBSON: Marketplace's Janet Babin reporting, thank you.

BABIN: Thank you.

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