Twitter is huge and just about everyone who is online knows it. Founded by Jack Dorsey, a software architect, the micro-blogging site has experienced explosive growth, particularly since the beginning of this year. It is believed that some fifty million people now use Twitter, not bad for a site founded in 2006.
What Twitter Is Worth
Recently, Twitter went “shopping” for cash and came up with a fifty million dollar investment, but what was most significant wasn’t the amount of money raised, but the new valuation for Twitter – one billion dollars. Yes, the same company who raised money back in February and was valued at $250 million at that time is now worth four times that amount. An amazing increase in just seven months time!
Insight Venture Partners of New York has been identified by TechCrunch and other leading sites as the company who provided the funds in the most recent round of investing. Insight poured money into Photobucket when it was a young company, reaping the rewards of a sale to News Corp. in 2007 for about $250 million.
Are Ads Coming?
Twitter hasn’t brought in much money since it was founded, choosing to concentrate on building its backbone and expanding its base first before running ads. Recent changes in the company’s Terms of Services (TOS) showed that running ads was an option that Twitter would eventually which may also include allowing people to set up business accounts for a fee.
Social media sites have always been difficult to monetize as users are generally ad adverse. Place a few ads on your site and you risk having everyone leave it for the next big thing. But, if you continue to run your business model without making money, the obvious happens – your investments are all tapped out.
While Twitter isn’t doing much in the way of making money off of ads, other services are. Then again, there are sites such as Topsy which provide a Twitter tool, but are themselves not running ads. At least not yet.
Follow Me On Twitter
Since I’m on the subject of Twitter, feel free to follow my mattkeegan account. Admittedly, I probably won’t follow you back if all your tweets are product pitches, so please keep that in mind when following me. I’m a dedicated tweeter and retweeter, but only of articles I like and for friends who carefully use Twitter to build a healthy following.