Twitter doubling revenue: An investor's dream?

(MoneyWatch) Social networks have had an uneven IPO history. LinkedIn (LNKD) has paid off for investors. Facebook (FB)? Not so much, at least for those early in as the stock has been down since it went public. Tumblr and Instagram have both been acquired. But that still leaves Twitter.

The messaging site's current valuation is almost $10 billion. But unlike the disappointment that became Facebook, the value may be low enough, and revenue growing fast enough, that investors will ultimately be satisfied -- when Twitter finally decides to hold its IPO.

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According to estimates from private company financial analyst PrivCo, Twitter should be on a $1 billion revenue run rate by the end of 2013. The company's sales have been doubling year over year. That should represent an attractive set of characteristics, according to an email from PrivCo CEO Sam Hamadeh:

Twitter is still much smaller in terms of revenues, less highly valued, and less mature in its monetization than Facebook was when it went public in May of last year. But that's actually precisely what IPO investors want: enough size and scale ... to be meaningful, but not so mature and overvalued already that the upside that is an IPO's bone marrow has been sucked from the company as was the case with Facebook.

The problem forFacebook was the roughly $104 billion valuation the stock had by the time it went public just over a year ago. The huge number drove stratospheric expectations that the company's respectable but straight line growth couldn't satisfy.

Twitter's valuation, on the other hand, is far lower because the company is still developing ways to make money from its traffic. That would leave room for the stock price to climb, giving investors a chance to profit.

Hamadeh also expects Twitter to be profitable, with projected operating income of $350 million next year. If the company files for an IPO toward the end of the year as he predicts, there could be a feeding frenzy.