"The analysts said that monetizing Twitter “would be difficult at best and likely unsuccessful.” People who sign up for free services tend to resent a company for trying to wring revenue from the business later. Subscription fees are out of the question, they said, and advertising-based revenues don’t seem to have yielded enough cash flow to make a Web 2.0 property viable."
BTW in a recent Portfolio article, Evan Williams the CEO of Twitter talked about some of his plans to make money with it.
So while Twitter does not yet generate cash, it will likely in the future. So how to value it? One way is to see what past firms in similar situations have done.
If you are in my class you know that the last case of the year that you present must be one you select yourself. Given that many of you may still be looking for a case, may I suggest you consider the valuation of Twitter? It could not be any more timely, would be able to tie in Venture Capital firms, and get a good history lesson on how other Web 2.0 firms have become profitable (or not). Sounds like a fun case to me! (BTW be sure to read some of the comments below the NY Times article, especially Ray's)
Disclaimer: I really like Twitter. I use it personally (some), for BonaResponds (MUCH more), and even just started for my family's grocery store chain Park and Shop. I really like getting messages from professional cyclists, authors, friends, and others BonaResponds have worked with. So I am biased. But I have to think there is value there.