Twitter just finished it a round of private venture capital raising and the new valuation for the start-up is around $1 Billion. Techcrunch reports that Twitter CEO Even Williams recently told employees that recently raised around $50 million dollars. This follows earlier rounds of capital fundraising that was valued at around $250 million, led by Benchmark Capital.
While it is clear that Twitter can raise money like no other start-up I can remember, what is not so clear is how exactly they are going to motenize their venture into something that actually makes money. Twitter has done a better job in turning something with no value into something with great potential then any company I’ve seen, but the end game is still unclear to me.
I get Twitter, I use Twitter and I think Twitter is a great tool and a great way of tracking the “pulse” of the Internet. What I still don’t get, and I’ll continue to struggle with is, how in the world can anyone turn this inane chatter into some kind of profit making venture. I think it’s entirely possible that by the time Biz Stone figures out exactly how to turn this company into something that makes a regular profit (as Facebook just did) they may go the way of Myspace.com. Let’s be serious here, a billion dollars? For what exactly? Why are big time venture capital firms investing so much in a company that has not yet shown any way to make a profit?
In any event, we’ll watch and see what happens, I agree that there is certainly a lot of potential and a lot of users (which can always be turned into potential revenue streams), but for now I remain skeptical of whether Twitter will ever make anything.