I've been sitting here thinking: Just how crazy is Twitter's $1 billion valuation? The reported valuation, which appears to be accompanying a $100 million financing round, has certainly drawn interest and even a few well-played jokes.

But I was trying to put the valuation in perspective, so I started looking at the market value for some of Seattle's mid-tier publicly-traded tech companies. Here's what I found: Twitter, if valued at $1 billion by T Rowe Price, Insight Venture Partners and others, would be worth more than RealNetworks, Cray and Marchex.

Combined.

In fact, Twitter would be valued slightly more than online diamond retailer Blue Nile (market value of $871 million) -- a profitable Seattle company with sales of $70 million last quarter.

The New York Times offered a similar comparison, pointing out that Twitter's valuation would be about double that of Domino's Pizza.

I guess selling pizzas and diamond rings doesn't compare to typing 140 character messages.

Of course, Twitter has next to no revenue. And that's where the skeptics chime in.

But it does have users -- more than 54 million monthly visitors -- and buzz like no other startup today -- Oprah, Conan and Ashton to name a few.

The bet for the venture investors -- as well as angels such as Amazon founder Jeff Bezos -- is that the service will become much more than just a way to share the mundane aspects of life. If all goes as planned, supporters believe it will become a transformative communications platform.

It is a very big bet. And raising $100 million certainly goes against the Web 2.0 mantra of building ideas on the cheap.

Whatever happens, with the type of money now involved, the stakes are raised to the point where we are talking about two possible outcomes: a mega success or a spectacular failure.

By the way, Twitter earlier today confirmed the investment though they aren't saying how much they raised or the valuation. Here's the statement:

It was important to us that we find investment partners who share our vision for building a company of enduring value. Twitter's journey has just begun and we are committed to building the best product, technology, and company possible. I'm proud of the team we've built so far and I'm confident in the future we'll build together.

Also, Hitwise takes a look at Twitter's marketshare compared to other sites and finds that it may have hit a "resistance point."