Should Facebook–or Someone Else–Take Another Run at Twitter?
Twitter–the non-money-making start-up that lets a user update status in a pithy manner–had a banner day last week with the inauguration of President Barack Obama, which followed all the tweets about the successful airline crash in the Hudson River in Manhattan, which came after…well, you get the point.
That kind of frenetic news cycle has kept Twitter growing quickly, last week surpassing the formerly hot–at least, according to the dopey echo chamber that is Web 2.0, which is as restless as a teenaged girl looking for the next Jonas Brother–Digg in Web traffic.
And that has apparently setting the stage for raising a big new round of funding.
The presumable third round of investment, according to MediaMemo, would nab Twitter $20 million in added cash and give it a $200 million to $250 million valuation.
That’s certainly a lot of simoleons for a company that makes no simoleons, of course, even though Twitter folks are always going on about how they don’t need money since the burn rate is so low and because they could turn on the revenue spigot any old time they want to.
Well, Twitter might want to ask Facebook about how burn rates can rise quicker than you think and how hard it is to get that pump of revenue truly going in a sustainable way.
Still, you have to love the chutzpah of Twitter, which is correct to get if the getting is good in this not-so-good economy.
But before the valuation becomes so rich as to make Twitter completely impossible to buy by anyone, the company might want to reconsider what it considered and abandoned late last year, as BoomTown reported in endless detail, which was an acquisition of Twitter by Facebook.
1.) The pair actually do fit nicely together, creating the most powerful universal address book ever, and pairing the two fastest growing social-networking assets on the Web.
2.) While the likelihood of Facebook going public anytime soon remains dim, due to the weak economy and lack-of-enough-revenue issues, the idea of Twitter doing so is laughable.
3.) Some larger company, I would bet my favorite Barry Manilow album, will eventually buy Twitter–my vote would be Google (GOOG)–but higher valuations make an exit harder. Before that happens, Twitter should get itself the home where it would have the most autonomy and influence, which still is Facebook.
Well, no one is listening to me, obviously!
The initial deal between Facebook and Twitter fail-whaled after Twitter decided that the $500 million in cash and stock offer from Facebook was not to its liking.
That liking was for more cash and also, presumably, the lack of interest in being bossed around by Facebook Founder and CEO Mark Zuckerberg.
Everyone had a different take on the nonconsummation of the marriage of Facebook and Twitter.
Some thought Twitter was right to take a shot at building its business as well as it has its traffic, while others thought that goal and refusal to sell were the height of trend-induced hubris.
Whatever the case, Twitter is now making a definitive choice that it can make itself into an even tastier target or even a real company someday with this new round of funding.
And while it might seem another infusion of investment dollars might take the pressure off Twitter, I actually think the pressure has never been higher.