Wednesday, July 2, 2008

What's Twitter doing right now? Investors would like to know

For an upstart Internet company, one couldn't ask for better endorsements than Barack Obama using your service to update his supporters or NASA's Phoenix Mars Lander utilizing your network to declare to the world that it has found evidence of ice on the Red Planet.

That kind of exposure is helping Twitter Inc., a quirky micro-blogging service that has become a staple within the tech community, to attract the attention of mainstream users and investors.

Investors, however, want to know whether Twitter has what it takes to become the next Internet darling capable of an initial public offering, or whether it is simply the latest in a long line of Internet startups that are long on potential but prove short on real-world value.

Venture capitalists, hoping to discover the next social networking phenomenon like MySpace or Facebook, are investing heavily in companies such as Twitter that they believe can translate rapidly expanding user bases into cold, hard advertising dollars.

"Twitter is a really interesting company but I don't think the industry knows what to do with it," said Jennifer Simpson, an Internet communication analyst with market research firm Yankee Group in Boston.

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