With $35 Million More in the Bank, What's Next for Twitter?
Posted by: Rob Hof on February 13, 2009
It appears the venture funding market isn’t closed for everyone, not even Web 2.0 startups with no apparent revenue plan. Twitter, the white-hot microblogging service, just raised more than $35 million, most of it from new investors Benchmark Capital and Institutional Venture Partners. Cofounder Biz Stone says the company, whose service that marries 140-character text messages with social networking is the current obsession of the digerati, wasn’t looking for new funding but says (quite literally) it has big plans. From his blog post:
Big Plans for Twitter, Inc.
We are now positioned extremely well to support the accelerating growth of our service, further enable the robust ecosystem sprouting up around Twitter, and yes, to begin building revenue-generating products. Throughout this year and beyond, our small team will grow much bigger to meet the challenges and opportunities ahead.
Twitter is making a real impact around the world as people, companies, and organizations everywhere discover a powerful new way to communicate and find out what’s happening—right now. With these new partnerships and this new funding, we are in a position to move more confidently toward our vision for a robust and successful Twitter, Inc.
Which says exactly nothing about what those plans are. In the past week, there has been much discussion about whether Twitter might have the potential to pull a fast one on Google, bringing the usefulness (and maybe the business model) of search to what some call the real-time Web. In particular, John Borthwick put forth the notion in a long post on Feb. 8 on Silicon Alley Insider (only at the end of which he disclosed that he’s an investor in Twitter—oh, OK!) that Twitter could make Google the “next victim of creative destruction”:
… Take a simple example of how Twitter Search changes everything. Imagine you are in line waiting for coffee and you hear people chattering about a plane landing on the Hudson. You go back to your desk and search Google for plane on the Hudson — today — weeks after the event, Google is replete with results — but the DAY of the incident there was nothing on the topic to be found on Google. Yet at http://search.twitter.com the conversations are right there in front of you. The same holds for any topical issues — lipstick on pig? — for real time questions, real time branding analysis, tracking a new product launch — on pretty much any subject if you want to know whats happening now, search.twitter.com will come up with a superior result set.
How is real time search different? History isnt that relevant — relevancy is driven mostly by time. One of the Twitter search engineers said to me a few months ago that his CS professor wouldn’t technically regard Twitter Search as search. The primary axis for relevancy is time — this is very different to traditional search. Next, similar to video search — real time search melds search, navigation and browsing.
I’m still feeling my way around his arguments, as well as the many responses around the blogosphere pro and con. I think there’s something to the notion that real-time information, which isn’t yet Google’s forte (though it’s better than Borthwick implies), has value to people.
But Twitter isn’t the only company providing real-time info like this. There’s a little company called Facebook where people have been doing status updates for years. And more to the point for a company with a valuation of $250 million (!), is there a business here?
The most interesting answer is that Twitter has a repository of data on what people are doing right now that could be very valuable to marketers. But precisely how, I’m not sure yet. In any case, it’s going to have to be rather more sophisticated than “charging businesses for certain features they can use to talk to customers on Twitter.”
Meantime, I don’t think Google’s executives are losing too much sleep over Twitter yet. If and when they do, they can write a big check.