Quoted – Twitter‘s $100M Funding Coup Prompts ‘Bubble’ Buzz -ECommerce Times

Can a company that doesn’t have a revenue stream possibly be worth $10 billion? That’s the question that a group of investors are answering with an unequivocal “yes” in the form of $100 million in cold cash. There is skepticism over the wheeling and dealing, though, and more than a few flashes of dot-com deja vu.

After much speculation, Twitter CEO Evan Williams confirmed on the microblogging site’s own blog that it has closed a “significant” round of funding. Williams didn’t cite the dollar amount, but it has been widely reported that six investors are prepared to pump close to US$100 million into the company, giving it a $1 billion valuation.

An evaluation of $1 billion for Twitter might be too low, suggested Scott Testa, a business professor at Cabrini College, considering the site’s popularity and traffic, which comScore places at close to 60 million visitors a month.

“The pricing is justified, based on the latest round of financing closed by Facebook and other networking properties,” Testa argued.

Furthermore, this generation of tech investment is different from 10 years ago, because the funding comes from institutional sources.

“You don’t see the funny money being thrown around like we did in the 1990s,” noted Testa.

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