Report: VC infusion values Twitter at $250 million
TechCrunch is reporting Saturday night that Twitter may have signed a term sheet with one or more venture capital firms that would value the microblogging company at $250 million.
Although it did not provide specifics, the report cited "a source with knowledge of the deal."
Last fall, Facebook was said to have made an offer to buy Twitter worth as much as $500 million.
"Rumor is Twitter hit up more than a few venture firms to pitch the $250 million valuation, and got more than one 'no,'" TechCrunch wrote Saturday. "But someone's bit, perhaps encouraged by Twitter's breakneck growth and the interest from Facebook. That means Twitter gets a new cash injection and time to figure out its business model at an even more leisurely pace."
That certainly would be a boon for Twitter, which until now has not shown signs of a viable business model. Though it is growing rapidly and has millions of users, no one knows how the company could support itself. Some have worried that while it is increasingly useful to the many people who rely on it, it might not be financially viable over time.
If the TechCrunch report is accurate, however, it would be a signal that Twitter has managed to show investors enough of a structure of a business model to loosen up the cash it needs to get over that hump. Given today's general economic crisis, that would be a notable accomplishment.
Daniel Terdiman is a staff writer at CNET News covering games, Net culture, and everything in between. E-mail Daniel. 
Valued at $250 million? Based on what? Future ad revenue (Would a bank loan me $10 million now because I've the potential, and a good track of record, to make more than that in the near future?)? Facebook (One that still does not yet have any solid revenue generating model without violating users' privacy one way or another) offering?
How many readers here would invest your own money in Twitter? I wouldn't. Because of one, I don't have any. Two, it's not terribly difficult to switch from Twitter to another similar service providers except I would lost all my contacts (I guess someone smart would probably find a way to solve that). And three, would Twitter able to keep its current growth rate without the media, like Cnet.com, exposure that it has enjoyed so much?
They do nothing. It's a site where you txt stupid stuff to and they broadcast it out to people in your group. What's to stop someone (okay, maybe it would take 2 or 3 people) for making a site that does the same thing? Yeah you wouldn't have the population but that doesn't seem like a huge challenge.
Does twitter even make any money now?
I hope whatever fool gave these guys money gets soaked.
Have we not got past this yet?
But I do use it to share links, interesting news bits I find, and occasionally personal updates for those that are close to me.
One thing you need to remember is that just because you don't use it, doesn't mean its worthless as a whole.
I think you're very wrong. The fact that Twitter is so hugely popular means that there is some use for it. I dont (and neither do my friends) use twitter to tell each other what were doing every second of the day. Yes, that would be boring."
Yes people will use it as long as it's free... the problem with .com's is that their solution for everything is AD's we'll sell AD's... or We'll sell peoples personal information.
"One thing you need to remember is that just because you don't use it, doesn't mean its worthless as a whole. "
Absoulty correct so would you be willing to pay for it? Would your friends be willing to pay for it?
- by markdrury January 26, 2009 9:40 AM PST
- Why doesn't Twitter pimp ads in their text messages using 4INFO's ad platform? Such a revenue-sharing deal would be a small start, at least.
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