

Twitter May Raise Another $200 Million - dougludlow
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/10/23/businessinsider-twitter-may-raise-another-200-million-2010-10.DTL

======
blantonl
God Dammit! (Sorry...but) I cannot believe that a business such as this is not
able to fund itself! I own and operate a highly successful, bootstrapped, Web
based business, and when I see funding that comes in in the millions I'm
sometimes shaking my head.

Really.. _two hundred million_? If you haven't made it now, I can't imagine
you'll make it in the future unless you drastically change your business
model. _drastically_!

My position is if you can't monetize your business _soon_ after coming out of
the gates, you are just living a dream.

It appears there is absolutely no real concentrated approach to monetizing
Twitter's business model. This seems analogous to AT&T providing free SMS's to
all customers, and then trying to figure out a way to monetize SMS's.

Thank God I don't have to even think about funding, much less _multiple
rounds._

~~~
jonathanjaeger
The faster the innovation the easier it will be for Twitter to block out
competition in the future, not to mention keep a significant runway going for
expansion. While this strategy wouldn't be good for the average successful
startup, Twitter is obviously one of the top dogs in the web space right now
so they have the luxury to REALLY shoot for the stars. We obviously can't tell
what's in their innovation pipeline over the next two years, so it's hard to
make a judgement call like that. I mean look at Facebook, they don't see any
reason to become very profitable yet.

------
grease
Looks like they're raising money because they can (good valuation), but little
seems to be said about why (especially given that they still have money from
the last round)

~~~
shin_lao
Money never hurts. Raise as much as you can, spend as little as possible.

Running out of cash is the first reason why company go out of business ( _nota
bene:_ you can run out of cash and be profitable, cash != profits).

~~~
CoachRufus87
Dilution hurts.

~~~
kqr2
Perhaps Twitter is forecasting a future environment where raising cash will be
more difficult or under less favorable terms.

That happened at my last company. Management sold a lot of bonds with stock
warrants although we didn't need it at the time. The market tanked and we
would have been unable to raise additional cash. That bond money kept the
company going a little longer.

------
mickdarling
Kinda minimal on the content side for this article. But the linked article
[http://mediamemo.allthingsd.com/20101022/is-twitter-going-
ba...](http://mediamemo.allthingsd.com/20101022/is-twitter-going-back-to-the-
funding-well-for-a-giant-new-round/) does have some interesting info in it.
Partly that "...the company still has the majority of its cash from the last
round in the bank"

------
wensing
I remember Fred Wilson saying that Twitter is building a war chest to prove
that it's going to be around for the long haul, which is important to know if
you're building something on the Twitter platform. (Of course, since then
Twitter hasn't done the best job of befriending platform developers).

------
alexro
One reason : attracting the right people

------
ddemchuk
I simply can't fathom how this company has so much venture money already, and
is raising even more, and is over 3 years old, but still goes over capacity
practically hourly.

How hard is it to staff a team of engineers to get that damn site to be stable
when they have 10's of millions in the bank?

------
phlux
\---Thinking out loud---

There has been a significant evolution in the last 3-5 years respect to
building and growing a company.

Google/Facebook/Twitter/Zynga [and others] are all direct competitors.

They all vie for the same thing [time/information/attention] of their
audiences. There is no difference in what energy they need from their
respective audiences in this matter; thus their business execution strategy
requires vast capital to maintain their current hold on the slice of audience
energy in the long term.

It also plays into how they are defensible. Twitter is taking an offensive
position with its platform and how it treats apps built by the community. This
money will likely be used to acquire and defend itself until it irons out is
business model.

Zynga has been very silo'd in how it acts (their product originality issues
aside) with respect to innovation.

Facebook has an incredible committed user base that is not going anywhere
anytime soon.

Thus in the next two years, we will really see a battle on useful extensions
(profitable extensions) of these platforms that are all competing for the same
resources of their audience (attention and time).

So these companies all are hedging against coming innovation from each other
with respect to how they will garner that audience attention.

The evolution that I mentioned then, is in that the aggressive manner in which
these companies raise enormous funding is all based on their understanding
that they really are competition in the information state, and it doesn't
matter that one seems to be in a different space or appear to currently be
dependent on one another.

I think we really are on a precipice with respect to the landscape of how
people will primarily consume/contribute through their preferred sites.

