Peter Kafka

Recent Posts by Peter Kafka

Business Models Are Overrated! Twitter Raises Another $35 Million

See! Twitter did have news to report this week–but not about its elusive business model. The Web 2.0 microblogging-messaging platform everyone (or at least some of us) loves to obsess about has raised another $35 million.

Twitter has added Benchmark and Institutional Venture Partners to its list of investors, the company announced via a blog post today. Spark Capital and Union Square Ventures, which had previously invested in the company, have re-upped as well.

No details, of course, from Twitter about its current valuation. Last month the company was looking at raising $20 million or so at a valuation of $200 million to $250 million, and I’m told the new value is on the high side of that range.

The last time Twitter raised money, a little more than a year ago, investors pegged its value at just under $100 million. What’s changed since then? Well, it still doesn’t make any money. But it has many more users: The company says active users have increased 900 percent in the last year; comScore (SCOR) says the site’s home page now attracts 2.6 million unique a month, up 1,362 percent over the last year.

Anyone who’s ever read anything about Twitter knows that the company still has no revenue and/or business model–I just mentioned it one paragraph ago! So no need to go into that here. But for the record, note that co-founder Biz Stone, at the end of his funding announcement, says the company will indeed use some of its new money to go make…money: “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.”

And for a nice summary of the company’s promise and peril, check out this week’s New York magazine. Money quote, literally, from CEO Evan Williams: “We have a product, and we’re working on it,” Williams said, with more than a hint of exasperation. “The money will come.”


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik