Twitter valued at $3.7 billion



Twitter increases in value

Twitter increases in value

In what could be termed as private investors newly found romance with fast growing internet companies, micro-blogging site Twitter has been valued at $3.7 billion dollars, a sharp rise from last year’s valuation of $1 billion. The value of the company was discovered in the latest round of fund raising undertaken by its promoters.

The deal also brings on board one of the most prolific investors of the Silicon Valley – John Doerr of Kleiner Perkins Partner, the man credited with being one of the early promoter/investors of Google and Amazon.

Although Twitter refused to give details of the deal, one person familiar with the development claimed the company has managed to raise $200 million (£129 million). The Social networking site also brings two new members in its board, including David Rosenblatt, boss of digital advertising group DoubleClick.

The jump in value indicates the brand equity the company has managed to establish through its simple broadcasting service of short messages.

To make the company more profitable, it started a new service called ‘Sponsored Tweets’, thorough which advertisers can send out commercial messages against payment. Though the new offering is yet to turn profitable, early results seem to be promising. Around 5-8 percent of the messages were re-tweeted or used by the users in some other form. A much higher level of engagement than its rivals, claims the company.

Twitters valuation follows a recent trend of high valuations of privately held internet companies by Venture Capitalists or Strategic Companies like Google. They try to acquire the next ‘hot’ companies at an early stage. Google had come close to buying ‘Groupon’ for $6 billion, a private company engaged in online marketing service for local merchants.

The new microblogging site’s valuation is a notch higher than established media companies such as the ‘Gannett’ or the ‘Washington Post’ – the television and the newspaper group that publishes ‘USA Today’.

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