Twitter Worth $4 Billion? 4 Reasons Why it May Be So

(Dec. 1) -- Microblogging, it seems, can make megabucks.

According to a report in TechCrunch, current estimates of Twitter's market value have been placed as high as $4 billion. Sources tell TechCrunch that the venture capital firm Kleiner Perkins is prepared to offer that valuation for the company, which is reportedly exploring ways to raise more capital.

So how has the San Francisco-based social networking site managed to amass such a staggering price tag? Though George W. Bush may not agree with the analysis, Surge Desk explores a few prominent theories.

1. Twitter is addictive
Like cigarettes and scotch before, Twitter's creators have given the world a product that is highly addictive. Here's how one analyst put it to Times of London in 2009, when the company was valued at just $1 billion.

For their fans, Twitter and Facebook are redefining the way people communicate. Charlene Li, founder of Altimeter, a tech consultancy, said it was important to focus not just on the technology Twitter had developed but its relationship with the customer.

Li noted that people all around the world are now addicted to sharing their thoughts on Twitter, even their negative thoughts about Twitter itself -- that's a relationship that could be worth a billion.

2. Twitter is more than just a banal message system
In a 2009 study published in the journal PlosOne, Canadian researchers studied the way information on the H1N1 virus flowed on Twitter. They concluded that the microblogging site has done nothing short of reshaping human interaction:

This study illustrates the potential of using social media to conduct "infodemiology" studies for public health. 2009 H1N1-related tweets were primarily used to disseminate information from credible sources, but were also a source of opinions and experiences. Tweets can be used for real-time content analysis and knowledge translation research, allowing health authorities to respond to public concerns.

3. Twitter users are engaged
Because Twitter is so good at linking people with their particular interests, users interact with contact they find via the site in a more engaged manner. A 2009 study by TubeMogul (h/t to Mashable), for instance, found that Internet users who found videos via Twitter watched them for a much longer time than did users of rival social networks like Facebook or Digg, and that increase in time translates directly into revenue.

4. Twitter demographics
While the site hasn't really put forth an impressive moneymaking business plan, demographic research about its users shows that the company is sitting atop a powder keg. From Business Insider, we learn that 45 percent of Twitter users are in the coveted 18 to 34 age bracket. Moreover, 58 percent of Twitter users earn $60,000 per year or more.

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