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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 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, 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.

Reader Comments


February 14, 2009 2:14 AM

Searching Google or searching Twitter - both face the same problem of the value of results whether at the moment or slightly delayed. Anyone can post anything that comes up on either, and it seems the more popular Twitter gets, the more repetition and BS comes up.

Bill G.

February 17, 2009 1:58 PM

Who cares about this. Text Messaging is still better. Twitter is nothing but a chat page. It is same has text messaging anyone around the world. Good about mobile text messaging is that you don't need to be on a computer to do it.



February 20, 2009 1:16 AM

All this buzz about tiwtter!! A company with NO revenue and a business model that has yet to produce a dime. For most part the web 2.0 companies have failed to make money, the commodity is to get as many users in and out, USERS that are there to mostly waste time or hangout. This is completely different than a user ready to do transaction or searching for something. Maybe twitter is good for people that have time in hand, but mostly people with lot of time in hand are people that don't have very much money to make any purchases (which is the idea behind advertisement - Bringing people that have money to bite into those ads). Looking for a plane landing into hudson type of news doesn't add up to any dollars. The logic of John Borthwick about time being the axis and driver of the user searching is non-sense. A company that doesn't have anything on its own to offer and users being the driver of the content, is not a sustainable model. USERS switch behavior online because technology is going through rapid change so the dependency on the user to always create the latest cutting edge quality information is non-sense. These people are in cloud 9 and they better start thinking about something that is beyond hype.


February 22, 2009 3:24 AM

Although Twitter is another variation of social webbing, I don't see its value. There is constant search for the new buzz e-company, to give hope that the internet bubble is back on.

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