The Social

Forget flowers and chocolate. Valley darling Twitter is going to have a really sweet Valentine's Day. The company announced Friday that it has added some more cash to its most recent round of funding, thanks to an infusion from Benchmark and Institutional Venture Partners.

The deal just closed on Thursday night, according to a post on Twitter's official blog. But the team at Twitter, which has not yet put forth a business model, hopes to make it clear that they weren't desperate for cash.

"We weren't actively seeking more funding because significant capital from last year's partnership with Bijan (Sabet) and his team at Spark (Capital) is still in the bank," the post by co-founder Biz Stone read. "Nevertheless, our strong growth attracted interest and we decided to accept a unique opportunity to make Twitter even stronger with a very attractive offer."

Financial terms weren't disclosed in the blog post. The Silicon Alley Insider said they've heard $35 million from Institutional Venture Partners. We're looking into this; we heard that the company's valuation, meanwhile, may be as high as $250 million.

But wait! It sounds like money's on the way, even though Twitter just keeps raising more venture capital. "We are now positioned extremely well to support the accelerating growth of our service, further enable the robust ecosystem sprouting up around Twitter, and yes, to begin building revenue-generating products," Stone's blog post read. "Throughout this year and beyond, our small team will grow much bigger to meet the challenges and opportunities ahead."

Twitter raised its third funding round, led by Spark Capital, last spring.

This post was updated at 11:33 a.m. PT.

Here's a message for all the tech bloggers and reporters freaking out over the alleged Associated Press bombshell that some copy-paste legerdemain led to the revelation that Facebook valued itself at $3.7 billion at the time of the ConnectU vs. Facebook court settlement:

Please, chill out! This is not news!

While it had not yet been reported that the ConnectU settlement was a reported $65 million (though since it was in cash and stock, that value may have dropped with the onset of the recession), the $3.7 billion Facebook valuation has been around since July.

The New York Times' Brad Stone broke the figure--well, $3.75 billion--amid the hullabaloo surrounding the redacted court transcripts. I know we're bloggers and we have the attention spans of goldfish and all, but the hype over this "shocker" is a bit silly.

Earlier this week, the AP had obtained court documents dating back to June, when ConnectU vs. Facebook was settled. The founders of ConnectU, former Harvard classmates of Facebook founder Mark Zuckerberg, had sued the eventual CEO because they alleged he stole their intellectual property when he was employed as a programmer for ConnectU. But the court documents were kept sealed, largely because there was information pertaining to the privately owned Facebook's valuation. Media outlets, among them CNET News, had lobbied to have the redacted documents made public. The AP eventually used a copy-paste function in an electronic version in order to expose the censored content. Oops.

ConnectU, meanwhile, has contested the settlement because its founders, who include identical twins and Olympic rowers Cameron and Tyler Winklevoss, claimed they were misled as to how much Facebook was worth.

Facebook's valuation has been the subject of scrutiny ever since Microsoft invested $240 million in the social network at a sky-high $15 billion valuation. But that investment was one of preferred stock, and it soon became clear that Facebook's paper valuation was significantly lower.

The AP story does have one new tidbit: Facebook was appraised at $8.88 per potential share as part of the $3.7 billion valuation. That figure obviously has dropped since then, given the impact of the recession.

Aside from that, this is a story that was reported almost eight months ago. Keep calm and carry on, folks. To my fellow members of the media, I'm sure there's a "cool new use for Twitter" story to be reported. We clearly can't get enough of those.

Talk about spilling the beans: A marketing brochure for law firm Quinn Emanuel Urquhart Oliver & Hedges, which represented would-be social network ConnectU in its much-publicized suit against Facebook, claimed that the final settlement netted the site's founders a handsome $65 million in Facebook stock and cash.

Oops.

A Law.com article dug up the brochure and its claim, and has posted a .pdf file on the Web. According to the same article, principals at the law firm now regret posting the results. Meanwhile, ConnectU remains in a fee dispute with Quinn Emanuel, a fact which came to light when the plaintiff changed its mind about the suit's eventual settlement last year.

ConnectU was founded by twins Cameron Winklevoss and Tyler Winklevoss, along with their classmate Divya Narendra, when all three were students at Harvard University. They hired Mark Zuckerberg, now the CEO of Facebook, as a programmer and eventually alleged that he swiped their code and business model to create the now-ubiquitous social network.

ConnectU vs. Facebook, which had dragged on since 2004, eventually settled in August right around when Cameron and Tyler Winklevoss, who are identical twins, were finishing in sixth place in a rowing event at the 2008 Olympics in Beijing.

It seems like a staggering amount, considering the casual terms of ConnectU's employment agreement with Zuckerberg had meant that it was very difficult for the Winklevosses and Narendra to prove that there had been a physical theft of code. So keep this in mind: Even if Facebook's valuation is nowhere near the $15 billion that it was valued at in the halcyon days of that $240 million Microsoft investment, $65 million is fairly small potatoes for Zuckerberg & Co. They were likely willing to make some concessions to get a longstanding legal tiff off the table. (CNET Networks, then-publisher of CNET News, had intervened in the lawsuit for the limited purpose of trying to unseal some court records.)

Facebook, unsurprisingly, has opted not to comment on this situation.

Facebook might be hiring former Google employees left and right, but if current rumors are true, don't expect them to start instituting a free-food policy like Mountain View's any time soon.

Gossip blog Valleywag has reported for the past few days that Facebook is doing away with a $600 monthly housing subsidy offered to employees who opted to rent living space within proximity the company headquarters in Palo Alto, Calif. The latest rumor says that new hires are losing their housing subsidy, and that existing employees will only keep it until they move to new houses or re-sign their current leases.

A source close to Facebook (who is not a current employee) confirmed that yes, the housing subsidy existed in the first place and wasn't some mythical, Skull & Bones-esque benefit, but was unable to confirm whether the perk was getting the ax. Facebook declined to comment.

Valleywag has created a movie-worthy sort of narrative for Facebook: under the management of new chief operating officer Sheryl Sandberg and communications czar Elliot Schrage, both ex-Googlers, the company has reportedly been chipping away at cushy perks and a dorm-caliber corporate culture. Facebook's New York branch famously canceled its participation in a well-publicized beer-pong tournament against InterActiveCorp's CollegeHumor earlier this month, reportedly at the behest of PR-conscious upper management.

But unlike beer-pong, housing subsidies are something that actually make sense, especially for a company located in an expensive enclave like Silicon Valley as it tries to attract young employees who might not have a whole lot of savings in the bank (as well as student loans potentially breathing down their necks). It's also a "green"-friendly image booster, encouraging Facebookers to cut down on travel times (and hence, emissions) by giving them incentive to live close to the office.

So, if Facebook's housing subsidies were indeed axed, a number of factors could be at hand. On the less scandalous end of things, they could simply have been unpopular for one reason or another, or inefficient, especially as Facebook hires more and more employees. Or (and I'm really speculating here) some flagrant abuse of the privilege might have caused the company to cut them entirely--think about those stories that occasionally pop up in the news about rent-controlled tenants who illegally sublet their apartments at market value and then pocket the profit.

On the other hand, there's also the chance that Facebook is legitimately cutting costs as it attempts to deal with escalating hardware costs and tepid ad revenues--that's an industry-wide problem in social media, not restricted to this one company. Earlier this month, BusinessWeek reported that Facebook had borrowed $100 million to cover infrastructure expenses, and market research firm eMarketer recently lowered its projections for ad spending on social networks like Facebook.

So, by no means is it a concrete sign that Facebook's in financial trouble. But if housing subsidies have indeed been cut at the social network, it could be a sign that operations are in need of some streamlining. Paying for housing might work for a small start-up with healthy investment backing, but for a company that eventually hopes to file for an IPO and hit 1,000 employees by the end of the year--and which doesn't have Google's advertising muscle fueling profits--the situation could be very different.

On Monday, reports surfaced that business social network LinkedIn is likely looking to raise a round of venture capital (rather than find a corporate parent).

TechCrunch reports that investment bank Allen & Co. is hoping to help LinkedIn pull in that funding at a $1 billion valuation.

Spearheading the campaign is Dave Wehner, managing director of the Bay Area bank, who was reportedly a big part of Bebo's $850 million sale to AOL.

Why $1 billion? Well, LinkedIn says its target demographic has meant that it can pull in some pretty lucrative ad revenue, avoiding the "ad trap" that has hurt monetization efforts on the part of more general-focus social networks. The average user of LinkedIn (there are 20 million total) is reportedly 41 years old and makes about $110,000 annually.

That's made it possible for the social network to charge advertisers $75 per thousand impressions, which is almost unheard of in the social-media world.

Whether that's worth a full billion dollars, well, we'll have to find out.

NEW YORK--In his keynote speech on Wednesday morning at the Media and Money conference hosted by Dow Jones and Nielsen, former Disney CEO Michael Eisner talked about writers as though they were a minority group that he didn't particularly understand well. "I like writers. Some of my best friends are writers," he said as though attempting to save face. But nevertheless, his foremost epithet for the ongoing Writer's Guild of America strike was "stupid."

"I see stupid strikes, and I see less stupid strikes. I see smart strikes," Eisner said in the keynote, which was structured as a conversation with Neil P. Cavuto, senior vice president and managing editor of Fox Business News. "This is a stupid strike."

The problem, Eisner said, is that the Writer's Guild is lobbying for a bigger cut of the profits from digital distribution--and according to the former Disney chief, those profits simply aren't there. Eisner, now the head of a private investment firm called The Tornante Company, has launched an online video studio called Vuguru, and said that it's still more or less a fruitless labor. Vuguru's debut series, a serial mystery called Prom Queen, "didn't make money," he said.

Cavuto, naturally, played devil's advocate and asked Eisner why he's sticking with it. "First of all, I'm doing it because I think it's fun, I think it's the future, and I think it's interesting," Eisner replied, "(but) I'm begging advertisers to give me enough money to break even."

At the moment, Eisner said, digital media is too new to be profitable. "The studios are there because they don't want to be in the transportation business and telling everybody that they're in the train business," he said. "They want to be in the entertainment business, and God forbid they should forget yet another distribution track." In other words, they don't want to get left behind.

He said it would take about three years for Web video and other forms of digital distribution to gain enough of a foothold to be profitable--and that's when the Writer's Guild would have a case to make. "What I'm saying is for a current writer, for six thousand people to give up today's money for a nonexistent piece today is stupid," Eisner asserted. "They can do it in three years. They shouldn't be doing it now." Right now, the profit from digital content is "a piece of a nonexistent flow, which won't be nonexistent, but it will be nonexistent for the next three years."

One thing Cavuto failed to ask Eisner, who estimated that the Writer's Guild strike would dissipate by the end of next week, was exactly how Web video would start to be profitable. Presumably, advertisers will warm up to the opportunity.

But Eisner acknowledged that the studios and networks aren't entirely faultless. Their problem, he said, is hyping up digital platforms as being more profitable than they actually are. "It's a double-edged sword. The studios deserve what they're getting, because they've been announcing how great (the Internet) is. But then they open their books."

Eisner, a well-known critic of Apple (whose CEO, Steve Jobs, is a powerful member of Disney's board of directors), suggested that the profits may be getting sucked up elsewhere. The studios "make deals with Steve Jobs, who takes them to the cleaners. They make all these kinds of things, and who's making money? Apple! They should get a piece of Apple. If I was a union, I'd be striking up wherever he is."

"Cupertino?" Cavuto offered.