Twitter lines up additional funding
Twitter Inc. is nearing a deal for as much as $100 million in new funding that would buy the fast-growing Internet-messaging company more time to figure out its business model, according to people familiar with the situation.
The investor group is expected to include mutual-fund giant T. Rowe Price Group Inc. and private-equity firm Insight Venture Partners, which would be new investors to Twitter. Existing Twitter investors, including Spark Capital and Institutional Venture Partners, are also expected to participate in the round, according to the people familiar with the plan.
The investors are valuing Twitter -- which has yet to generate more than a trickle of revenue -- at about $1 billion, according to these people. That's more than triple the valuation Twitter received during its last round of capital raising in February, underscoring how quickly the company has grown.
Twitter, based in San Francisco, didn't respond to requests for comment.
Led by Chief Executive Evan Williams and co-founder Biz Stone, the microblogging service -- which allows people to send out short 140-character messages -- had 54.7 million unique visitors world-wide in August, up from 4.3 million in August 2008, according to comScore Inc.
The surge has drawn a frenzy of interest from investors, marketers and companies making software that allows people to send photos or videos over Twitter. The company has also piqued the interest of Internet giants like Google Inc. and Microsoft Corp., which have pitched Twitter on potential arrangements to help it sell advertising, according to people familiar with the matter.
Representatives for both companies declined to comment.
Twitter's new valuation creates a higher bar for any potential suitor to buy the company. Twitter executives have repeatedly said they aren't interested in cashing in on their early buzz and are committed to building an independent and sustainable business. The company recently hired several senior employees from Google and elsewhere. In a May interview, Mr. Williams said the company, then just 45 employees, could have more than 90 staffers by the end of 2009.
Still, the company has struggled to develop a business model. In recent months, Twitter executives have said they are working on developing possible premium services for business but haven't unveiled any such products. It did take a step in that direction earlier this year, announcing a service that verified users that it said it may roll out to businesses.
In May, Mr. Stone said in a company blog post that Twitter is leaving "the door open for exploration" around advertising.
Twitter also faces competition from companies such as Facebook Inc. that have also rolled out Twitter-like features. Facebook has opened up its site to allow people to share more of their content and notes publicly, for instance. The ability for people to broadcast messages to anyone who wants to read them, and not just their friends or people they know, has been one of Twitter's big draws.
Earlier this year, T. Rowe Price and Fidelity Investments invested $50 million in Slide Inc., a maker of social-networking applications, valuing it at $550 million. But amid the recession, Slide has had to refocus its business strategy.
Источник: Total Telecom
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