Billion Dollar Baby (Twitter and the Value of Buzz)

Twitter is raising new money in an effort that would assign a value of $1 billion to the company.  This, for a company that seems remarkably unconcerned about beating a path to any realistic business model. 

What does such a valuation mean? As the NY Times reported today:

For context, that is almost double the market capitalization of Domino’s Pizza,
which has 10,500 employees and had $1.4 billion in sales last year.
Twitter has some 60 employees, and although it is experimenting with
running advertisements on its Web site, Biz Stone, a Twitter founder,
said this week at an industry conference that the company had no plans
to begin widely running ads until 2010…  In its three and a half years, Twitter has become a magnet for media attention

To me there is no clearer demonstration about the sheer value of buzz and media coverage – not that there is not intrinsic value in Twitter and it service.  The value from a bottom line business standpoint is based on the intangible good will of enthusiastic users – a community that growths with every article, news mention and celebrity Tweet.