Could Twitter really be worth US$250m?

26 Jan 2009

Micro-blogging site Twitter is understood to be pursuing a venture capital (VC) funding round based on a valuation of US$250m, just months after turning down a rumoured US$500m buyout offer from Facebook.

According to famed Silicon Valley news blogger Michael Arrington’s TechCrunch, the company has signed a term sheet with at least one venture capitalist to raise funding based on the US$250m valuation.

Until now, Twitter has been urged by all who use it to pursue a monetisation strategy.

The micro-blogging behemoth has been gaining momentum in recent months, and in September had one million accounts and over five million visitors.

The site has even spun off a number of applications such as Twinkle, TwitterFox and TwitterVision.

The US$250m valuation suggests Twitter has taken a more grounded approach to growth, spurning an offer for twice the amount in recent months.

Facebook, on the other hand, accepted a whopping US$240m from Microsoft last year for a tiny 1.6pc sliver of the company, a move that valued it at US$15bn.

As cold economic realities come to bear, Twitter, which employs just 31 people, may be taking the correct approach, growing a captivated audience slowly but surely.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years