Is Twitter Going Back to the Funding Well for a Giant New Round?

Twitter, which has raised $160 million in its four-year history, may end up more than doubling that total: The messaging service is mulling yet another funding round that could see it raise more than $200 million.

It’s unclear how far into the fund-raising process the company is. One source familiar with the company’s thinking says Twitter isn’t actively seeking new funds, but has been fielding inbound requests to invest in the company, and that the volume of inquiries has spiked recently: “People have called them. At some point they’re going to consider if it’s a good idea or not.”

But a different source says the company has told investors it is contemplating raising “a very big round”–$200 million or more.

Twitter spokesman’s Sean Garrett’s response: “We don’t need the money and have made no decisions about additional financings.”

A year ago Twitter raised $100 million, at a billion-dollar valuation. Why go back to the well?

Some observers wonder if the company, which has more than 300 employees, substantial infrastructure costs and very little revenue, needs more money for operations, as it begins to roll out a serious advertising push. But I’m told that the company still has the majority of its cash from the last round in the bank.

A new deal would follow the example set by Facebook, Zynga and other high-growth, high-profile Web companies in the last year or so: More money for expansion, and in some cases to help early employees and investors cash out, without having to deal with the public markets.

It would also help put to rest a new round of speculation about a Twitter sale to a large buyer. In this case, chatters assume that Google would be the logical purchaser. But a new deal wouldn’t preclude a closer partnership with Google, which has been struggling to come up with its own social strategy, even as rival Microsoft has grown closer to Facebook.