Here is how I think about their value.  First off, Twitter, as I have argued, is a search business.  Regardless of how they monetize it in the future, the biggest value lies in the ability to siphon off search volume from the current leaders. So, the key questions to answer in coming to a value are:  how much share can they get and what is that share worth?  Let's start with the second question first.  Here are the current search market share stats:

So, what is a point of search share worth?  There really are only two semi-pure play search companies:

Google:  Market cap ($115bn) divided by share (81%) = 1.5bn per point of share

Yahoo:  Market cap ($18bn) divided by share (10%) - 1.8bn per point of share

Is this a fair way to get search share value?  Both these companies have other businesses that certainly contribute to value.  Of course, they also have businesses that detract (lots of high cost projects), but there is no question, search drives the vast majority of these market caps.  Yahoo has more diversified revenue source thus creating a premium.  Let's take the Google value and discount it since they get a dominant position premium.  So, let's cut it by 20%.  Therefore, for these purposes, a point of search share is worth $1.2bn.

Twitter is not even on the share map.  Why?  Well, they are not a search engine.  But, people are increasingly using Twitter to get information on products, reviews on events, news updates, etc.  And, this does not include anything creative they could do by aggregating links, retweets, influencer appeal, etc. to build real search results.

In the last week, I did about 1 twitter search for every 3 on google (this does not include my constant search streams I have in Tweetdeck).  Twitter has about 25% of my search volume.  Now, I am not your typical Internet user.  Let's say only 5% of people are like me.  That is 1.25% share.  

That creates a current value of $1.5bn (the discounted $1.2bn per share point x 1.25% share).  Now, you can poke all kinds of holes in this logic.  Even if you cut it in a third, you are looking at 1bn of real value TODAY.  Google and Yahoo are increasingly valued as mature companies - not on potential. Their growth is slowing massively, so their market caps are based on mostly current results.  Does Twitter have upside on their current position?  You better believe it.  

The potential of Twitter is enormous.  It is just hitting the mainstream.  The search model is not even developed.  The data created has option value above search.  And, the costs of running twitter have to be low.  No need to index the internet.  No need for millions of servers.

3x current value seems very reasonable to me given the current momentum.  So, $3bn to buy Twitter.  Not only is it worth this much, but the founders don't need to sell.  They have made money and they know the downsides being bought.  It will take an incredible offer to even create consideration.  $3bn could be low.  

If you think this is crazy, consider Ballmer was willing to pay $20bn plus for Yahoo - a business with many assets but decreasing traction and tons of complexity.  Is the hottest Internet property, with huge search game changing potential not worth 1/7th of that?  I think it is a no brainer.