Funding
Twitter's San Francisco headquarters located at 1355 Market St.
Twitter raised over US$57 million from venture capitalist growth funding, although exact numbers are not publicly disclosed. Twitter's first A round of funding was for an undisclosed amount that is rumored to have been between US$1 million and US$5 million. Its second B round of funding in 2008 was for US$22 million and its third C round of funding in 2009 was for US$35 million from Institutional Venture Partners and Benchmark Capital along with an undisclosed amount from other investors including Union Square Ventures, Spark Capital and Insight Venture Partners. Twitter is backed by Union Square Ventures, Digital Garage, Spark Capital, and Bezos Expeditions.
In May 2008, The Industry Standard remarked that Twitter's long-term viability is limited by a lack of revenue.[109] Twitter board member Todd Chaffee forecast that the company could profit from e-commerce, noting that users may want to buy items directly from Twitter since it already provides product recommendations and promotions.[110]
The company raised US$200 million in new venture capital in December 2010, at a valuation of approximately US$3.7 billion. In March 2011, 35,000 Twitter shares sold for US$34.50 each on Sharespost, an implied valuation of US$7.8 billion. In August, 2010 Twitter announced a "significant" investment lead by Digital Sky Technologies that, at US$800 million, was reported to be the largest venture round in history.
Twitter has been identified as a possible candidate for an initial public offering by 2013.
In December 2011, the Saudi prince Alwaleed bin Talal invested $300 million in Twitter. The company was valued at $8.4 billion at the time.
Revenue sources
In July 2009, some of Twitter's revenue and user growth documents were published on TechCrunch after being illegally obtained by Hacker Croll. The documents projected 2009 revenues of US$400,000 in the third quarter and US$4 million in the fourth quarter along with 25 million users by the end of the year. The projections for the end of 2013 were US$1.54 billion in revenue, US$111 million in net earnings, and 1 billion users. No information about how Twitter planned to achieve those numbers was published. In response, Twitter co-founder Biz Stone published a blog post suggesting the possibility of legal action against the hacker.
On April 13, 2010, Twitter announced plans to offer paid advertising for companies that would be able to purchase "promoted tweets" to appear in selective search results on the Twitter website, similar to Google Adwords' advertising model. As of April 13, Twitter announced it had already signed up a number of companies wishing to advertise including Sony Pictures, Red Bull, Best Buy, and Starbucks.
To continue their advertising campaign, Twitter announced on March 20, 2012, that it would be bringing its promoted tweets to mobile devices. Twitter generated US$139.5 million in advertising sales during 2011 and expects this number to grow 86.3% to US$259.9 million in 2012.
The company generated US$45 million in annual revenue in 2010, after beginning sales midway through that year. The company operated at a loss through most of 2010. Revenues were forecast for US$100 million to US$110 million in 2011. Users' photos can generate royalty-free revenue for Twitter, with an agreement with WENN being announced in May 2011. In June 2011, Twitter announced that it would offer small businesses a self serve advertising system.
