November 18, 2010 / 2:55 AM / in 7 years

Twitter says has "a lot of money in the bank"

SAN FRANCISCO (Reuters) - Twitter co-founder Evan Williams said the popular microblogging company was not running low on capital, amid media reports that the company is considering raising a large round of funding.

Williams told an industry gathering in San Francisco on Wednesday that Twitter has “a lot of money in the bank.” He declined to comment on whether the company was in discussions with investment firms about funding.

San Francisco-based Twitter has 175 million users and is one of the most popular Internet social networking services. The company, which allows its users to broadcast short, 140-character messages, or Tweets, to groups of “followers,” has only recently started efforts to generate revenue through special ads that appear in certain parts of its service.

Williams, speaking at the Web 2.0 conference on Wednesday, said the company’s initial efforts at generating advertising revenue had exceeded the company’s expectations, though he declined to provide financial details.

He also noted that Twitter was in talks with Facebook, the world’s No. 1 social networking service, about ways that the two companies’ services might interoperate. Williams said that Facebook had blocked Twitter from integrating its service with Facebook, which he described as frustrating.

“We’re talking to them often to see if there is a way to work together, but so far neither side has found out a way to do that,” Williams said.

A popular technology blog reported earlier on Wednesday that Twitter is considering raising funding that would value the company at $3 billion. Russian technology investment firm DST Global is seeking to lead the funding round, which would be larger than the $100 million that Twitter raised in September 2009, according to a report on TechCrunch. r.reuters.com/gek95q

The report said that other investors are also eager to be involved.

A Twitter spokesperson said the company does not comment on rumors.

Last year Twitter raised $100 million, valuing the company at $1 billion, from investors including Insight Venture Partners, Spark Capital and mutual fund giant T. Rowe Price.

An investment in Twitter would add to DST’s impressive portfolio of social networking companies, which currently includes Facebook, the world’s No. 1 social network; Zynga; and Groupon.

DST Chairman Yuri Milner acknowledged that Twitter was among the 25 to 30 companies that would fit his firm’s investing strategy during an on-stage interview at the Web 2.0 conference in San Francisco on Tuesday, though he declined to comment specifically on whether DST was talking to Twitter about a deal.

Milner said that DST invests in companies that typically have a $1 billion-dollar plus valuation, are in the “social Internet space,” and can be located anywhere in the world.

“My guess is there are probably 25 to 30 companies like that,” he said.

He also noted that about 80 percent of the volume of DST’s investments is made through buying shares of a company on the secondary markets, rather than through direct investments.

Reporting by Alexei Oreskovic; Editing by Gerald E. McCormick, Phil Berlowitz

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