Webware

Unsurprisingly, at least one research company agrees that valuing a company at $1.1 billion before it's unveiled a long-term revenue strategy is a little bit premature.

A firm called Next Up Research released a study this week that estimates Twitter's actual value as somewhere between $526 million and $674 million--or somewhere between 47 and 61 percent of what its valuation was in September when Insight Venture Partners, T. Rowe Price, and other investors pumped nearly $100 million into the company..

The positives for Twitter? It's been able to scale to approximately 70 million users while maintaining a single office in San Francisco and about 80 employees--well, sure, but the fail whale does tend to rear its head--and the fact that you can use it almost exclusively as a low-end mobile application means a whole lot of potential for global reach.

Next Up's concerns are pretty predictable: It's not sure how Twitter will keep up its momentum as it prepares to roll out a revenue model. It spelled out a few options that have been tossed around over the past few years--ads on Twitter.com, ads in tweets, charging for access to its application program interface (API), premium accounts, selling data and analytics--but noted that "most revenue generation options available to the company have the potential to alienate at least some of cult-like Twitter's user base."

Regardless, the research firm is guessing that revenues will come. It's projecting $134 million in revenues in 2013, "in an optimistic scenario." Now let's sit back and see how Twitter does it.

LOS ANGELES--Twitter didn't rake in $100 million because it was about to run out of money, investor and board member Bijan Sabet of Spark Capital said in a panel at the 140 Conference on Tuesday morning.

There was still money left over, Sabet explained, from what the company had raised from Benchmark Capital and Institutional Venture Partners in February, which followed Twitter's Series C round in the spring of 2008. Twitter, according to Sabet, raised the money from Insight Venture Partners and T. Rowe Price last month because it wanted to grow up: hire new people, launch new products, strike partnerships, and the like. Contrary to Twitter's reputation for "fail whale" errors, Sabet insisted that the money wasn't needed for an emergency server shopping spree or anything. (Some may disagree.)

"The expectation when you raise a lot of money, it's a statement that you want to build a company, an independent company," Sabet said when moderator Robert Scoble asked him what he thought of the fact that Twitter has not yet put forth a long-term business model. "We didn't need the money...it was a very purposeful kind of commitment to try to make a company."

A billion-dollar valuation is pretty nice to have, too.

A correction was made at 2:13 p.m. PT: a source with knowledge of the deal confirmed that Twitter's April 2008 and February 2009 rounds of funding are considered to be separate rounds.

Evan Williams (left) and John Battelle (right)

(Credit: James Martin/CNET)

SAN FRANCISCO--In anticipation of an onstage interview with Twitter CEO Evan Williams at the Web 2.0 Summit on Tuesday afternoon, conference organizer and Federated Media CEO John Battelle told the audience to expect "a surprise" during the talk.

Turns out that "surprise" was actually a recently unearthed video clip of Williams in 1994, explaining the Internet on behalf of a company called Illumination Labs and sporting a haircut that looked like it belonged on the set of '90s alterna-teen flick "Empire Records." (No, we don't have a snapshot of it yet.)

Williams didn't really say a whole lot else about where Twitter's going, beyond what the world already knows: it's been growing fast. It turned down a buyout offer from Facebook. It just raised a ton of money. It still hasn't disclosed a long-term revenue model.

Evan Williams

(Credit: James Martin/CNET)

"It's not like we're spending our days looking in the couch cushions for the elusive revenue model, but obviously we've done a lot of thinking about it," Williams said, declining to comment on the potential of search deals with Google or Microsoft. "I can't tell you exactly what the model is, but it's pretty obvious to you that there may be some advertising that makes sense...there's a lot of commercial activity on Twitter today, there's a lot of brand marketers who use Twitter today, and it works. We think of Twitter (as) not a social network, it's an information network...a substantial part of that is commercial and theoretically monetizable information."

Williams, who previously founded Pyra Labs and sold its flagship Blogger product to Google, took over as CEO of Twitter from fellow co-founder Jack Dorsey last year. Dorsey, who remains Twitter chairman, is working on a new mobile commerce start-up called Square.

In his talk at Web 2.0 Summit, Williams mentioned new features like user-generated "lists," currently in beta, and said that they may end up replacing the site's current (and much-maligned) "suggested user" list altogether. ("It's gone on too long, and I desperately want to kill it or evolve it.") He also said that "some things we're launching" may counteract recent slowdowns in Twitter's U.S. Web-based traffic, which was growing exponentially not so long ago.

"We are seeing slowing of growth in some areas and accelerating growth in other areas. Twitter is very hard to measure, even for us," Williams said. "The biggest two areas that we're seeing growth is on mobile and internationally." Last week, the company inked new mobile deals in India and Japan; currently, its five biggest markets are the U.S., the U.K., Japan, Brazil, and Indonesia, which has been "growing like crazy lately."

So what does he think of the other players in the real-time Web? He's not sure what to make of Google Wave ("I sure as hell don't know what Google Wave is going to be. I haven't wrapped my head around it yet") but underscored that in Twitter's early days he wasn't sure what that would turn out to be either. And as for Facebook, he shrugged off speculation that the social-networking giant started aping Twitter when it was unable to actually buy it.

"I don't know how Facebook's feature prioritization works. I suspect that they came to a lot of the same conclusions we did," Williams said. "In the global sense, I'm pretty sure the world is big enough for Facebook and Twitter, and fundamentally I think they're good at different things. Facebook is phenomenal at communications among people who know each other."

Facebook ultimately purchased a far smaller streaming-information start-up, FriendFeed, this summer.

"We had a few conversations with our friends in Palo Alto (Facebook) and ultimately I just didn't see a reason to sell if that opportunity would have presented itself because it's not the point," he continued regarding the failed acquisition. "The point is really to see what we can build. We believe very strongly in that at Twitter, and enabling the open exchange of information is a good thing for the world."

It's his usual schpiel. Aside from the Nirvana-era haircut, there wasn't a whole lot to tweet about here.

Former Current Media executive Robin Sloan appears to have posted Twitter's 5 billionth tweet, in the form of a reply to another user that otherwise read only "Oh lord."

A third-party app called Gigatweet has been measuring the service's total tweet count for some time now, and last week some onlookers picked up on the fact that it was getting awfully close to five billion. That said, Twitter's engineers have bumped up this number at least once or twice, and who knows how many test tweets were sent out in the company's early days.

But Sloan's tweet, which he has nicknamed "The Pentagigatweet," does get at least some landmark status because it actually has the number 5,000,000,000 in the URL. That's because the number at the end of a tweet's URL is apparently the running count of tweets that have been posted until that point. We've e-mailed Twitter co-founder Biz Stone for more information and will update if and when we hear back.

The guy who posted Twitter's 5 billionth tweet.

(Credit: Robin Sloan's Facebook profile)

It's sort of fitting that Twitter's 5 billionth tweet came not from one of the celebrities or marketers who have flooded the service in recent months, but from one of the quirky Bay Area dot-com nerds who formed its first loyal pack of users.

Sloan, who lives in San Francisco, recently departed his gig at Current--which is headquartered only a few blocks away from Twitter's own home base in the South of Market neighborhood--to write a still unnamed novel" that he is funding through creative-microfinance site Kickstarter.

He may have just gotten a convenient leg up in publicity.

Meanwhile, some third-party observers have been remarking that Twitter's rapid growth may be slowing down. The company recently raised another round of funding at a valuation somewhere in the neighborhood of $1 billion.

This post was expanded at 10:20 p.m PDT.

Correction at 2:25 p.m. PDT Tuesday: This post initially referenced an incorrect title for the novel Sloan is working on. The novel is still unnamed.

Something has dammed the Twitter river. I bet it was this guy.

(Credit: Creative Commons licensed: flickr.com/photos/sherseydc)

Holy cow. Is nothing on the Internet working these days? Facebook's acknowledged that a number of members have had account maintenance issues, and now Twitter has confirmed that "many" users are experiencing timeline delay problems.

Basically, the lowdown is that you can post tweets, and they'll publish, but that your timeline--the stream of updates from the Twitter accounts you follow--isn't bringing up any new tweets. For me, it looks like this started at around 8:00 a.m. PT.

Twitter, which has been prone to many an outage in its three-year history, says it is investigating the problem and will provide an update shortly.

(Photo by Flickr user sherseydc, licensed under Creative Commons).

The enterprise microblogging service Socialcast is getting some interesting analytical functions. Unlike the data you can get from Bitly (the closest most people get to seeing real analytics on microblogging), Socialcast's new Social Business Intelligence feature is designed to help the mucky-mucks in your company "understand the social dynamics or your organization," not just see traffic patterns.

If your company uses the Socialcast service for more than just occasional hobbyist microblogging--that is, if whoever hooked up your company with Socialcast also set up the important features the service offers, like integration into CRM, wikis, employee blogs, and other internal systems--then there could be a rich stream of social data coming from the product. Socialcast SBI can tap into this data to identify, in broad strokes, three main types of people in your company: the information "brokers," the "connectors," and the "peripheral players." Even "active listening" is tracked, by watching posts that users flag with the "like" button.

The point is to make sure that your company can leverage the tastemakers among their staff--people you can't identify just by looking at an org chart. Another selling point: SBI helps make sure that when a person is about to leave the company, you know what you're losing in terms of social connections that may be important to keeping particular projects running or clients happy. There's an HR department term for this: "knowledge loss mitigation."

SBI also means that someone could be watching what you do on the platform and that this information may play a part in how you are treated by your employer. Yes, it's true: they could end up paying you more if you Twitter or do the equivalent on Socialcast.

Socialcast lets you examine how your employees connect to others.

(Credit: Socialcast)

Socialcast has both a free and paid service, and SBI is an additional fee on top of that: It's $1,500 a year per seat for the people who get to see the analytics. Socialcast CEO Tim Young thinks that most companies, even those with more than the typical 240 users per installation, will buy one to three seats, so they can learn about their employees' social connections.

The service doesn't yet pick up connections in e-mail (Exchange servers, for example) or from PBX (phone) systems, but those data streams may be added in the future.

So if your company starts using Socialcast, don't dismiss it. Not only is it a useful service (as I've written previously), but participating in it could help your career.

Yes, Twitter's megacash infusion is real. CEO Evan Williams confirmed on the company blog Friday that Twitter has raised a new round of investment from Insight Venture Partners, T. Rowe Price, and existing investors Institutional Venture Partners, Spark Capital, and Benchmark Capital.

Williams says it's "a significant round." He didn't say just how close it was to the roughly $100 million that The Wall Street Journal reported Thursday. Nor did he say whether this values Twitter at $1 billion.

"It was important to us that we find investment partners who share our vision for building a company of enduring value," Williams wrote in the blog post. "Twitter's journey has just begun, and we are committed to building the best product, technology, and company possible. I'm proud of the team we've built so far, and I'm confident in the future we'll build together."

Before the end of the year, Twitter is expected to start rolling out paid corporate accounts to businesses that use the service for marketing, promotion, and customer service.

Twitter's long-anticipated business plan had better be close on the horizon, because according to the Wall Street Journal, the site has some new investors on board: Mutual fund T. Rowe Price, Insight Venture Partners, and a handful of others have reportedly pumped $100 million into the microblogging phenomenon.

TechCrunch reported last week that Twitter was putting together a round of funding at around a $1 billion valuation. But that report suggested that the company would do so by raising about $50 million--half of what it actually has, per the WSJ, in a deal expected to close Thursday.

Twitter still doesn't make significant revenue. But its founders have said that paid corporate accounts, in the form of a sort of "analytics dashboard," are imminent. Advertising isn't out of the question either, despite what some of the company's executives have said in the past.

The company's initial round of Series B funding last year valued it at about $80 million, but soon added to the round in a deal that upped the valuation well into the hundreds of millions.

A study from the Helsinki Institute for Information Technology has found that most microbloggers are updating their status with "mundane" messages.

Curiously, the Finnish institute chose to examine the also-ran microblogging platform Jaiku. In sifting through 400,000 messages on Jaiku, HIIT found that the most common messages users send out include the words "working," "home," "work," "lunch," and "sleeping."

"Microblogging works because of the total control users have over their postings, but it is a hobby that seems to require a significant investment of time which many cannot afford," the Institute said in a statement.

Jaiku is now a shadow of its former self, some two years after it was acquired by Google. According to the site's About page, it's "maintained by volunteer Google engineers on their spare time," after the Web giant decided at the start of the year that a half-dozen products including Jaiku, Dodgeball, and Google Video weren't contributing to its brand or bottom line. In March, the service was moved to Google's App Engine. The company also open sourced its code base, putting the future of the service "in developer hands."

As valuable as the Institute's finding might be to Jaiku users, Twitter is the dominating force in the microblogging space. The Institute didn't analyze tweets, making the study less applicable to the entire population of microblog users.

That said, earlier this year the Oxford University Press studied 1.5 million tweets to see which words were found most frequently on the popular service. Aside from obvious words like "the," "it," "and," and "to," the organization found that "work", one of the top words on Jaiku, is also a top term on Twitter. It was included in over 26,000 tweets the organization analyzed and was one of the most-used terms on the site. One of the least-used terms Oxford found in its study was "running." It was included in just 3,195 of the 1.5 million tweets it researched.

The study from the Helsinki Institute for Information Technology will be available in an upcoming issue of the Personal and Ubiquitous Computing Journal.