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No, Twitter isn’t getting too old to be private

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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January 9, 2013, 5:36 PM ET
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FORTUNE — A lot of people expect Twitter to go public this year, judging by various lists of 2013 business predictions. Others believe it will happen in 2014, based on CEO Dick Costolo’s practiced indifference when asked.

But here’s one thing that’s certain: Twitter will not pick a listing date based on its own age.

I’ve heard this theory a lot lately, and it’s absurd. Basically an outgrowth from the Facebook experience, suggesting that the social network’s IPO problems were more about timing than about aggressive pricing and Nasdaq’s infrastructure meltdown. If only it hadn’t waited so long, everything would have been peachy.

I’ve heard this theory a lot lately, and it’s absurd.

For context, here are a handful of tech company “ages” from founding at the time of IPO:

  • LinkedIn (LNKD): 9 years
  • Facebook (FB): 8 years
  • Pandora (P): 11 years
  • Groupon (GRPN): 3 years
  • Zynga (ZNGA): 4 years
  • Yelp (YELP): 7 years
  • Sutterstock (SSTK): 10 years
  • Workday (WDAY): 7 years

Able to make any sense of that, in terms of the optimal age for going public? Me neither.

Moreover, how can anyone say that Twitter had better go out by early next year, lest it meet the same fate as Facebook? Twitter predecessor company Odeo was founded in 2005 to focus on podcasting, with the micro-messaging service not actually created until the following spring. In other words, Twitter in 2014 will be the same age as Facebook was at the time of its own IPO!

I’ve also read suggestions that the “age issue” is really about how long Twitter has been monetizing, rather than about how long it’s actually been incorporated. Really? Seems that in early 2014 Twitter will have been generating significant revenue for about the same amount of time that Groupon was at the time of its IPO. And sure it’s important to still be growing at the time of IPO, but most public market investors understand that revenue growth rates are flatter at an 8 year-old company than at a startup. Even if a company manages to public public at the perfect inflection point, growth will eventually slow and it will be reflected in future trading.

To be sure, Twitter has learned a bunch of lessons from Facebook’s public experience. It has learned to better manage employee trades of private company stock. It’s learned to rid its board of almost all its venture capitalists. But it’s learned nothing about age, because there was nothing to learn in the first place.

Sign up for Dan’s daily email newsletter on deals and deal-makers: GetTermSheet.com

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