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Search - Friday, September 25, 2009

Coverage Wrap-up On Twitter Funding

Twitter has raised $100M at a $1B valuation from Insight Venture Partners and T. Rowe Price. Google News counts 264 articles on the news at this point.

The Wall Street Journal broke the story. They indicate that the amount of funding was 2x expectations.

The Journal adds that: "Besides wondering how Twitter will make money (see here on its latest plans), we’re interested in figuring out how the investors will profit. At a $1 billion valuation, the company would need to sell for at least three times that amount for its latest investors to make a decent return….or 5x to 10x that amount to make an excellent, venture-type return. That would suggest they’re building Twitter for the long-haul."

The NYTimes: Runs a photo of Co-founder Biz Stone and leads with the comment that Twitter "has no discernible revenue," adding that "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."

The Times speculates that "Twitter could use the investment to build the technology infrastructure required to grow to that scale. It also might use the cash to acquire one or more of the companies that are writing Twitter programs for mobile phones and computer desktops. Twitter could even find a business model for itself if it were to buy one of the several start-ups devoted to helping companies manage their Twitter presence and monitor how their brands are being discussed." They close with competition stating Twitter’s newly lined pockets may have the biggest impact on its chief rival, Facebook.

PeHub asks readers which is a better $1B valued company - Twitter or LinkedIn. LinkedIn has the cat-bird seat with its clear revenue model while Twitter is the fastest growing service on the net.

Twitter has yet to comment on the deal.