Twitter Aims For ‘Always On’ With Spark, Bezos Cash
, June 30, 2008
Sometimes the best way to decide whether to invest in a company is to use its product yourself.
That was the case for Bijan Sabet, general partner at Spark Capital, who tried Twitter Inc.‘s microblogging service about a year ago and quickly became addicted. Now, Spark has led a second round of funding in the company.
“I’ve observed since using it first-hand how important it is to me personally and the people I’m interacting with online,” said Sabet, who has taken a seat on Twitter’s board.
The funding, reported by GigaOm to be worth $15 million, was also provided by new investor Bezos Expeditions, the personal investment firm of Amazon.com Inc. founder Jeff Bezos, as well as existing investors Union Square Ventures and Tokyo-based Digital Garage. The company declined to discuss the amount of funding or valuation.
Twitter, based in San Francisco, has become the digital tool of choice for technology early adopters for its 140-character maximum micro-blogging service. It has also become a sort of group chat service. The service is now used for posting breaking news, and has been integrated with third-party music, gaming and social networking services.
Twitter is a new type of communications tool, Sabet believes. Unlike instant messaging, which is one-to-one, Twitter is one-to-many. The messages can also be viewed publicly in many other third-party services, unlike instant messaging.
The funding will go primarily toward addressing the company’s biggest problem: repeated downtime of the service. Sabet acknowledged the problems, but said the service has made some steady improvements in the past month.
“The lion’s share of all activity is now going towards making this always on, so it really becomes a global communications utility,” Sabet said.
The problem has been mainly due to the explosion of use of the service, which approximately doubled from March to April and has continued at a torrid pace, according to Chris Sacca, an angel investor in Twitter and former head of special initiatives at Google Inc. There has also been a 30 to 1 rate of hits coming from third party API calls versus Twitter Web site hits, a massive amount of traffic for the company to address, Sacca said.
“One interesting thing about Twitter was [that] they didn’t tell users how to use it,” Sacca said. “They didn’t artificially restrict use cases and instead let users use their imagination.”
The downside of that rapid user growth has been almost full-time focus on keeping the service up. The new funding will allow some flexibility to also add long-awaited features. Generating revenue is not a priority right now, Sacca said. Twitter has tested ads on Twitter’s Japanese version.
“There isn’t a lot of pressure to roll out that stuff,” Sacca said. “Nevertheless, we’re seeing more companies want a commercial presence. It’s an increasingly important channel for communications with a company.”
Sacca said the company could eventually release opt-in features such as instant notifications from a bar about its happy hour or special sales from a ski resort after a snowstorm.
[By: Tomio Geron]
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