Peter Kafka

Recent Posts by Peter Kafka

A Year After Twitter's Cold Shoulder, Twitter Ad Shop 140 Proof Says It's Doing Great

What happens to a Twitter-based company after Twitter tells them to go away?

In the case of 140 Proof, it seems like they do okay.

About a year ago, Twitter put the kibosh on 140 Proof’s plans to sell ads side by side with Twitter users’ posts. But the start-up has modified its product and says that by the end of 2011, it will be profitable and on a pace to generate more than $10 million a year in sales.

That story has helped the company raise $2.5 million in a Series B round led by BlueRun ventures, which also participated in the company’s first $2 million round. Mark Kingdon, the former CEO of Web ad agency Organic, invested in both rounds, along with other angels.

140 Proof used to be one of several companies that sold or hoped to sell ads within Twitter users’ streams, a practice that Twitter stopped in 2010. It was one of several moves Twitter made in the last year that added restraints to what had been a live-and-let-live approach to third party companies.

140 Proof’s new strategy: It buys real estate on third-party social media software like Echofon and Tweetcaster, and rents that space out to advertisers. Here’s a sample:

The ads, to my eyes, look like Twitter messages, which I thought Twitter was trying to discourage. But they sit at the top of the stream, and 140 Proof says Twitter is okay with them.

I asked Twitter reps to confirm that the company approved. They declined to comment.

140 Proof also points out that it will sell ads against other social media platforms that aren’t Twitter, too. Here’s a blog post excerpt from sales chief Andy Scott, published this week, which boasts that “Twitter’s attempt to ‘spank the ecosystem’ is good for 140 Proof:”

The ecosystem continued to pivot away from a pure-play “same as” level of innovation that is about aggregation of social and real-time from multiple sources — Twitter is just one. Will Twitter own social/real-time updates on the scale of Google and Facebook walled gardens? Doesn’t look like it. Love Twitter, but these horses have left the barn and don’t want to come home. The more Twitter builds up the walls ex post facto — the more entire exploding segments (hello group texting!) bag its unpredictable closed system altogether. Classic platform trade-offs, god love an open world.

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