Something to tweet about: Twitter valued at $1B

SAN FRANCISCO (AP) - September 25, 2009 In the latest indication of the fervor surrounding its popular messaging service, Twitter has raised $100 million in a deal that values the 3-year-old company at $1 billion.

Twitter itself didn't spell out the terms of the investment, saying only in a Friday blog posting that the amount was significant. A person with knowledge of the negotiations confirmed the amounts to The Associated Press on condition of anonymity because the parties had agreed not to announce the specifics.

Evan Williams and Biz Stone, Twitter's co-founders, declined an interview request placed through a company representative.

The latest stakes were sold to three of Twitter's existing investors - Benchmark Capital, Institutional Venture Partners and Spark Capital - and two new shareholders, Insight Venture Partners and T. Rowe Price.

San Francisco-based Twitter had previously raised $55 million, with the latest infusion of $35 million coming just seven months ago.

With so much money in the bank, Twitter's founders appear determined to raise their billion-dollar baby on their own instead of selling to a corporate parent. Twitter turned down a $500 million buyout offer from Facebook Inc. last year and both Google Inc. and Microsoft Corp. were rumored to be inquiring about a possible acquisition earlier this year.

Both Williams and Stone have publicly stated they hope to keep Twitter independent - and now they have the means to do that, at least for awhile longer.

"This is a smart move by Twitter because it buys them more time to capitalize on their momentum and come up with a business plan," said Ken Marlin, a technology investment banker in New York with Marlin & Associates.

Twitter has mulled the possibility of selling ads on the site, although Williams and Stone have indicated that isn't at the top of their agenda. Yet Twitter has some revenue-producing plans. Internal company documents leaked on the Internet during the summer included projections of $140 million in revenue next year.

For now Williams and Stone have been focusing instead on building Twitter's audience.

Twitter has more than 54 million worldwide users who share their thoughts, activities, Web links and other information in messages no longer than 140 characters. Just a year ago, only 4 million people were "tweeting" - the term commonly used to describe the chatter on Twitter. By 2013, Twitter hopes to have 1 billion users, making its service "the pulse of the planet," according to the leaked documents.

Although Twitter's site is filled with banal commentary, it also has become a forum for witty repartee and helpful insights and even a cauldron for fomenting political protests during the backlash to Iran's presidential elections this year.

It also has become a platform for companies and celebrities to promote their brands and personalities. Twitter has hinted it could capitalize on that, perhaps by introducing fees on some accounts primarily used for commercial purposes. Twitter has a rich vein of data about people's opinions and preferences that would be valuable to marketers. Google and other search engines also might be willing to pay for better and quicker access to Twitter's postings.

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