The big story being discussed across digital media is Twitter’s 1 Billion dollar valuation and the impending 100 million dollar funding from various investors. The story first reported by WSJ states that twitter is in the final rounds of talks to close a whopping 100 million dollar funding from investors like mutual fund giant T. Rowe Price and private-equity firm Insight Venture Partners.
Now if this does get confirmed then the question that arises is Why is twitter raising such a huge amount?
100 million is a lot and unless twitter plans to hire 200 odd engineers to build 200 + innovative features this kind of funding doesn’t really make sense! Also a 1 billion dollar valuation is again huge when you consider that this is just a 2 year old company.
What we feel about this funding?
We feel that in the space that twitter is users come first and any form of advertising would be introduced after much thought and deliberation. To me this funding looks like a way to buy time both for further product development and for rolling out full fledged monetization strategies. Also keep in mind that twitter turned down a lot of web giants who tried to acquire it and hence it needs to now monetize on its own to keep its boat afloat.
We would love to know our readers thoughts on the same. What do you feel is twitter’s 1 billion valuation too high? or low?
