With recent discussion of Twitter’s latest round of venture capital, securing an estimated $50 million, I can only shake my head in disgust. There are lofty valuations and then there are just silly valuations. Not just silly… absurd.

Remember, Twitter is currently generating somewhere near $0  {zero} in revenue. Their only product is a simple messaging service that can, and has, been copied quite easily. While I have an inherent belief their platform is somewhat stable, they appear to already be plagued with bad press covering outages, bugs, quirks, and much-needed criticism of their overall viability.

Over the past year, there have been rumors of Twitter leveraging advertising as the primary revenue generation method. While advertising may be what ultimately funds the fantasy,  any company silly enough to consider taking an interest in Twitter should be ready for a giant pool of goodwill on the balance sheet.

Consider that eBay purchased Skype, a service with far more utility than Twitter, for close to $4 billion. Current assumptions of the value of Twitter put it at 1/4 of the value of Skype when eBay made the purchase. Only a couple years later, eBay ate a nice chunk of goodwill on the Skype purchase, reducing the value of Skype at purchase time to somewhere around $2.6 billion. Think about that – when eBay bought Skype, the underlying actual value eBay received was just over 2 x the claimed value of Twitter.

Why? Twitter doesn’t do anything unique or interesting. Sure, cross-linking what amounts to nothing more than short messages is crafty, yet the ultimate utility is far smaller than what the appraisers make of it.

Twitter is a one-trick pony and I dare say that unless they teach the pony any more tricks, it is nothing more than another epic dot-com disaster waiting to happen a-la 2000