March 30, 2011
Twitter confirms "significant" funding from DST
Joining the ranks of Facebook, Groupon and Zynga, the microblogging darling catches Yuri's wallet
Twitter announced Monday that it has raised a “significant” round of funding led by DST Global, the Yuri Milner-operated venture capital firm obsessed with extending the private life of late-stage startups.
The company revealed the news in a blog post:
We’ve come very far in a short time. Now we have an opportunity to expand Twitter’s reach with a significant round of funding led by the venture firm DST Global, with the participation of several of our existing investors. We will use these resources to aggressively innovate, hire more great people and invest in international expansion.
Terms of the deal, including size of the round or valuation, have not been disclosed.
Finally official, Twitter’s new funding had been rumored for over a month, with the most recent report claiming the deal would be sized at around $800 million, with $400 million dedicated specifically to cashing out current company employees and investors. The round would value Twitter at a reported $8 billion, more than double the $3.7 billion valuation Kleiner Perkins Caufield & Byers gave Twitter for its last financing in December.
DST, or Digital Sky Technologies for long, holds stakes in several other prominent Web companies, including Facebook, Groupon, Spotify and Zynga. As a contributor to Y Combinator startups, though, it’s clear that DST is not just about the obvious heavy-hitters.
In addition to the funding, Twitter brought us up to speed with several of the company’s milestones:
--A year ago: 65 million tweets posted per day. Today: 200 million tweets posted per day.
--A year ago: 150K registered Twitter apps. Today: over one million apps.
--A year ago: 250 employees. Today: over 600-strong.
--Oh, and the company finally has some official office space in New York City.
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What is Twitter?
Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Where did the idea for Twitter come from?
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
How is Twitter built?
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
How do you make money from Twitter?
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.
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