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Twitter to raise funding at $1 billion valuation?

September 16th, 2009 |

Author: admin

Twitter is attempting to raise funding at a $1 billion valuation, according to a TechCrunch post Wednesday.

The blog cited unnamed sources claiming that Twitter CEO Evan Williams announced the valuation in a recent meeting. According to TechCrunch’s sources, Twitter plans to raise about $50 million during the financing round. The company has already raised about $55 million in funding.

Twitter hasn’t immediately responded to requests for comment.

In February, Twitter co-founder Biz Stone announced in a blog post that his company raised approximately $35 million in a Series C round of funding led by Benchmark and Institutional Venture Partners. At the time, it was reported that Twitter’s valuation for the round was about $250 million. Assuming that both reports are true, Twitter is contending that it’s now worth four times as much as it was just seven months ago.

Of course, determining the real value of a company is a subjective practice. And most times, those figures change rapidly as economic factors impact the company’s operation.

Twitter, which has yet to turn a profit, still hasn’t implemented a profit-making business model. That could have a major impact on its valuation, regardless of the figure.

That said, Twitter co-founder Biz Stone said in an interview with VentureBeat last month that his company will implement a revenue model by the end of the year. He wouldn’t dig too deep into details, but he did say it would incorporate paid accounts for businesses that want to use the platform for marketing and customer relations.

But just how those paid accounts will impact Twitter’s growing user base is up for debate. Will companies go elsewhere to promote their brands? Will they pay Twitter’s fees? All that can impact the company’s real value.

So as Twitter possibly heads into another round of funding, it’s important to remember that valuations are fluid numbers that are easily changed. It’s also important to note that so far, Twitter hasn’t confirmed that $1 billion valuation. So maintain some skepticism, as we do, until we hear from Twitter.

Source :

http://news.cnet.com/8301-17939_109-10355207-2.html?part=rss&subj=news&tag=2547-1_3-0-20