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Twitter valued at $1 billion
Author: Gareth HalfacreePublished: 25th September 2009
Twitter might annoy some and delight others, but at least seven venture capital firms think its worth $1 billion.
As reported over on Silicon Valley Insider, the popular microblogging site is running another round of funding, and it's looking like a big one: venture capitalists are allegedly looking to pour $100 million (£62.24 million) into the company.
The investment from seven separate venture capitalists values Twitter at a staggering $1 billion (£622.4 million) - not bad for a company which, at its heart, is pretty much just a web-based SMS service and a significant boost on its last round valuation of $225 million (£140 million).
The investment comes at the same time as the launch of an unofficial App Store-inspired service dubbed OneForty. As reported over on AppScout, the service - currently in private beta - features 1,332 (and isn't it a shame they couldn't find five more?) applications built around Twitter's API in categories including Analytics, Games, Browser Plugins, Business, and Automation. Both free and paid applications are available, but there's no mention of how much of a cut Twitter gets of the proceeds - if any.
This is, of course, Twitter's problem: despite its incredible popularity, the service struggles to find a path to profit. With its entire raison d'être being to offer a free, quick communication system it's hard to see precisely how it can turn traffic into cash. With companies increasingly interested in the holy grail of real-time search data - and sitting as it does on possibly the biggest and freshest cache of such information - that could all change very quickly indeed. For now, however, the investors are putting money into a company which - in its own words - "[spends] more money than we make."
Can you see the lure of Twitter that would cause venture capitalists to value the company at $1 billion, or does it just seem like more Web 2.0 hype? Could we be heading for another dot-com bubble? Share your thoughts over in the forums.
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I mean, maybe I'm old, but what really is the allure in reading that your friend had a tuna on rye twitter that is so appealing?
Twitter sucks, it's death is inevitable.
If I owned Twitter - I would float it, make a billion dollars and hide on a desert island because the investors would soon realise what a well-marketed con the whole thing is.
It seems that anyone can come up with some pointless idea and put it on the web, so long as it's addictive enough and draws people in then people will be willing to throw money at you. Look at what you get for that $1billion; the company has next to no assets whatsoever, is making very little profit, and has a business model that relies on the fickle Internet-goers who are just looking for that next popular social networking site to dump all of their spare time into.
I say we all blame Stephen Fry.
Not seen the appeal of it myself, but then I've avoided things like Facebook/Myspace/Livejournal like the plague as well.
That plus the twee graphics makes me feel like I'm trapped on the Loco Roco loading screen.
Just think, with all of us guys behind you, you'll be bathing in money in no time.
No, I'm afraid we'd also have to involve some talentless celebrities to achieve that kind of success.