The rumour: Twitter is thinking about taking more funding, and Russian holding firm Digital Sky Technologies is the most likely new investor.So is it true?
A source close to DST CEO Yuri Milner tells us, “I know he was interested two months ago in Twitter – and he is not interested in many things.”
A second source close to DST confirms that the firm has taken a long hard look at Twitter.
But that’s kind of obvious: DST invests in big web companies that have blown past the early, startup stage and have built up enough momentum that success almost seems inevitable. There are only so many companies in that class, and Twtter is one of them.
So what’s the holdup? Any number of things could be holding up a deal – timing, apathy from Twitter shareholders, or even competitive bids.
But if DST is the party holding back, our speculation is that it would be for one reason: Twitter ads aren’t generating enough revenue yet.
DST’s recent investments include Zynga, GroupOn, and Facebook. Each of those companies share two primary attributes:
- Incredible user-adoption driven by the “social” web.
- Huge and growing revenues between $200 million and $1.5 billion.
Obviously, Twitter has huge user-adoption. But though the company has, in the past six months, made great strides toward even trying to make money, we’ve yet to see any evidence that it’s getting anywhere.
Bottom line: If DST invests, take that as a sign that Twitter’s ad business is getting somewhere. If DST doesn’t, there is still reason to worry.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.