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Twitter Leaving Nest? Taking Risks, Raising Funds & Buying Companies

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Twitter continues to grow rapidly, but to stand in the social world of tomorrow the company will have to do more than that. Recent acquisitions of outside companies and a new round of funding from private investors seem aimed at precisely that purpose.

Twitter Purchases BackTweets

BackTweets, a third-party company that analyzes tweet trends and looks for how far a given Tweet or Twitter user spreads their influence, has been picked up by Twitter itself. The exact details have not been disclosed, and Twitter has not commented on the purchase. BackTweets, however, left a notification on their site. "Joining Twitter gives us the opportunity to bring insight to tens of millions of publishers around the world that are using Twitter to communicate and connect with their audience," read a statement on the BackTweet blog.

backtweets

BackType's services will remain partially available to users who have already signed up for the services, but the service won't accept new users. It's generally to be assumed that the functionality will remain unavailable until said functions are re-released under the Twitter brand. The exact purpose of the acquisition has been the topic of some debate, however. CNET writer Rafe Needleman believes that BackTweet's "Storm feature, which is said to be able to process the 'firehose' of Twitter data in real time [...] is the real reason Twitter bought the company."

In my own less than humble opinion, the Storm feature is just one element of the acquisition's value. As Twitter continues to push for a self-service advertising system and attempts to monetize more effectively, tracking the movers and shakers of the industry is the absolute must here.

The New Financing Round

Rather than selling themselves off, as some assumed they would, or becoming a public company, Twitter has taken the road less traveled: pursuing yet another round of financing from private investors. As reported by the Wall Street Journal, "The round could yield hundreds of millions of dollars and value Twitter as high as $7 billion."

What does this move tell us?

For one, it makes it clear that Google will not be picking up Twitter as some had previously assumed it might. This is further validated by the fact that Twitter and Google haven't re-upped their partnership deal for the Google Realtime search.

Twitter's upcoming round of funding also means that the company is getting ready to push forward with other features, expansions, or acquisitions, which indicates that it's fighting to remain competitive in the increasingly feisty social web. While there are numerous areas where Twitter may invest, its advertising mechanism is the big candidate for the next major overhaul.


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