$100 million coming Twitter's way

 

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By Reuters

Posted on 25 Sep 2009 at 08:44

Twitter could secure as much as $100 million, as it embarks on a fresh round of venture funding, reports suggest.

If it goes ahead, the $100 million investment - twice as much as Twitter had been expected to get in its latest round of fundraising - would value the fast-growing microblogging site at about $1 billion.

The participation of T. Rowe Price, a mutual fund known more for investments in public companies than in start-ups, stirred speculation that Twitter could be moving toward an eventual public offering or acquisition.

"You only see this type of behavior typically when a fund is seeking to get a position before an IPO," notes Brigantine Advisors analyst Colin Gillis.

Twitter has become an internet sensation in its three-year history, with worldwide visitors to its site hitting 44.5 million in June, up 15-fold from a year earlier, according to comScore data. But the San Francisco-based company has only just begun to focus on making money from its free service.

However, analysts continue to speculate that Twitter will eventually be acquired, citing Google, Yahoo and AOL as potential buyers.

"Anybody who is taking a position like that is taking a bet that either they (Twitter) find a business model - which they haven't yet - or more likely that someone with a lot of money burning a hole in their pocket will buy them," says Sanford Bernstein analyst Jeff Lindsay.

A February round of funding, led by Institutional Venture Partners and Benchmark Capital, had valued Twitter at about $250 million. The pair jointly invested $35 million in Twitter during that round.