I don't know what kind of Christmas party blackmail the founders of Twitter have on major investors T. Row Price and Insight Venture Partners among others but it must have been bad enough for them to throw another 100 million their way. With their newest injection of capital the company has attained a theoretical value of 1 billion dollars and it gets better.
Biz Stone, co-founder of Twitter, made a statement to reporters in Tel Aviv on November 24th stating that Twitter will "start making money" in 2010 by means of "non-traditional" advertising.
My favorite part of this entire story is that Stone still feels there is no need to create a business plan because they have so much money that it doesn't matter.
"There are no dates when we need to break even. We have plenty of money in the bank," Stone said.
So if they don't seem very motivated to find direction are they even doing anything with the ridiculously large pile of investor capital that any business owner would probably OD off of? The answer is, kind of. They are doing exactly what I would do in their situation. Looking at interesting prospects for acquisition while still keeping their development platform open to as many developers as possible.
Stone added that Twitter would like to make more acquisitions in the near future. "That is something we are definitely interested in. We made an acquisition last year that turned out to be an outstandingly good decision."
Twitter must be doing something right as, according to tracker comScore, the site had 44.5 million worldwide visitors in June, that is 15 times more than last year.
Those of you reading might be thinking that I sound somewhat bitter and jealous. While I can't deny the fact that every time investors give them more needless capital, I feel like beating my head against the wall until I forget my Twitter login and password, as a struggling entrepreneur, this hits close to home. I can appreciate the fact that the owners did not want to sell out to a corporation but what really gets me is that investors are in love with the idea of a social networking site that is basically Facebook status updates. They really have to be creative in order to keep people interested over the long term and I have yet to see the level of advancement necessary to make that a reality. Like Stone said, there is no rush because they are so overinflated with non-working capital. He still needs to be aware that there will come a time sooner than later when the hype will subside and Twitter will require new content and innovation to maintain its growth. As of right now they are completely unprepared for that situation. To sum everything up, the people running Twitter seem like deer in the headlights when it comes to running their business. Do I think I could do a better job? Not necessarily but necessity and discontent are the mother of all invention and progression. Those seem to be lacking when it comes to Twitter and that is very concerning.