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The Recession Can't Break Twitter

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As if we didn't already have enough evidence that Twitter was recession-proof, Michael Arrington of TechCrunch this weekend cited sources who say the company has raised another round of funding at a $250 million valuation.

If true, Twitter is worth $100 million more today than it was in December, when blogger The Huffington Post raised $25 million in capital at a $100 million valuation. (Reports from Arrington and others pegged Twitter's worth at $150 million at the time.)

Twitter last raised money in June from Amazon.com (Nasdaq: AMZN  ) CEO Jeff Bezos and others. Ever since, we speculators have been wondering exactly how the service would generate revenue. I've thought about it as an emerging wire service, for example -- a citizen's version of what Thomson Reuters (NYSE: TRI  ) and Bloomberg provide.

Others see Twitter as having a menu of moneymaking options. Tech blogger and Fast Company TV host Robert Scoble earlier this month proposed nine ideas via his closely watched FriendFeed profile. Among his suggestions were selling virtual goods a la Facebook, frequent tweeting programs, viral ads, and a subscription model.

Few of these ideas were unique -- Alltop.com co-founder Guy Kawasaki first polled about Twitter charging a monthly fee, for example -- yet every one sparked discussion. Yours truly got in on the thread with this tidbit: "What about platform support via [development] tools? Encourage the ecosystem and make money at the same time?"

If that theme sounds familiar, it should. I've argued that Twitter is an emerging platform that's helping to birth new companies, such as StockTwits and Xpenser. That's important because platforms, when they catch on, can unleash billions in value. Witness Google (Nasdaq: GOOG  ) , eBay (Nasdaq: EBAY  ) , and Apple's (Nasdaq: AAPL  ) iTunes App Store.

These are platforms whose network effects led to massive growth. Twitter, with an estimated 6 million users, is following the same pattern. And it's worth $100 million more today as a result.

There's a recession, you say? Someone forgot to tell Twitter.

Foolishness all a'Twitter:

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Fool contributor Tim Beyers had stock and options positions in Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is flying high, like a bird in the sky. It'll never die.


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Tim Beyers
TMFMileHigh

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at timbeyers.me or send email to tbeyers@fool.com. For more insights, follow Tim on Google+ and Twitter.

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