A few weeks ago, Twitter closed a $35-million financing round – cash that didn’t necessarily need but, nevertheless, accepted. It was an interesting move given Twitter has only 20 employees, and its annual cash burn is probably about $5-million.
Still, some major venture capitalists are bullish about Twitter’s future and its ability to turn a fast-growing user base into a fast-growing business. This assumes, of course, that Twitter can discover a business model.
While most people applauded Twitter’s ability to raise so much cash, and its investors patted themselves on the back about what a smart move they had made, there are skeptics who don’t see Twitter evolving into a major business.
Among them is Sanford Bernstein, which published a research note last week that suggested monetizing Twitter “would be difficult at best and likely unsuccessful”. (Hat tip to DealBook)
Sanford Bernstein’s bearish approach is based on its belief the Web 2.0 model of building something and then figuring out a way to make money is no longer valid.
Apparently, Twitter has some revenue-generating plans that it will unveil soon. Personally, relevant and contextual advertising seems like the best route given the fast-growing audience but Twitter’s founder have strangely rejected the concept.
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Doubts About Twitter the Business
Here’s an interesting contrast in opinion.
A few weeks ago, Twitter closed a $35-million financing round – cash that didn’t necessarily need but, nevertheless, accepted. It was an interesting move given Twitter has only 20 employees, and its annual cash burn is probably about $5-million.
Still, some major venture capitalists are bullish about Twitter’s future and its ability to turn a fast-growing user base into a fast-growing business. This assumes, of course, that Twitter can discover a business model.
While most people applauded Twitter’s ability to raise so much cash, and its investors patted themselves on the back about what a smart move they had made, there are skeptics who don’t see Twitter evolving into a major business.
Among them is Sanford Bernstein, which published a research note last week that suggested monetizing Twitter “would be difficult at best and likely unsuccessful”. (Hat tip to DealBook)
Sanford Bernstein’s bearish approach is based on its belief the Web 2.0 model of building something and then figuring out a way to make money is no longer valid.
Apparently, Twitter has some revenue-generating plans that it will unveil soon. Personally, relevant and contextual advertising seems like the best route given the fast-growing audience but Twitter’s founder have strangely rejected the concept.