God Dammit! (Sorry...but) I cannot believe that a business such as this is not able to fund itself! I own and operate a highly successful, bootstrapped, Web based business, and when I see funding that comes in in the millions I'm sometimes shaking my head.

Really.. two hundred million? If you haven't made it now, I can't imagine you'll make it in the future unless you drastically change your business model. drastically!

My position is if you can't monetize your business soon after coming out of the gates, you are just living a dream.

It appears there is absolutely no real concentrated approach to monetizing Twitter's business model. This seems analogous to AT&T providing free SMS's to all customers, and then trying to figure out a way to monetize SMS's.

Thank God I don't have to even think about funding, much less multiple rounds.

The faster the innovation the easier it will be for Twitter to block out competition in the future, not to mention keep a significant runway going for expansion. While this strategy wouldn't be good for the average successful startup, Twitter is obviously one of the top dogs in the web space right now so they have the luxury to REALLY shoot for the stars. We obviously can't tell what's in their innovation pipeline over the next two years, so it's hard to make a judgement call like that. I mean look at Facebook, they don't see any reason to become very profitable yet.

Looks like they're raising money because they can (good valuation), but little seems to be said about why (especially given that they still have money from the last round)

Money never hurts. Raise as much as you can, spend as little as possible.

Running out of cash is the first reason why company go out of business (nota bene: you can run out of cash and be profitable, cash != profits).

Dilution hurts.

Perhaps Twitter is forecasting a future environment where raising cash will be more difficult or under less favorable terms.

That happened at my last company. Management sold a lot of bonds with stock warrants although we didn't need it at the time. The market tanked and we would have been unable to raise additional cash. That bond money kept the company going a little longer.

Acquisitions wouldn't be particularly surprising, if you ask me.

Kinda minimal on the content side for this article. But the linked article http://mediamemo.allthingsd.com/20101022/is-twitter-going-ba... does have some interesting info in it. Partly that "...the company still has the majority of its cash from the last round in the bank"

I remember Fred Wilson saying that Twitter is building a war chest to prove that it's going to be around for the long haul, which is important to know if you're building something on the Twitter platform. (Of course, since then Twitter hasn't done the best job of befriending platform developers).

I simply can't fathom how this company has so much venture money already, and is raising even more, and is over 3 years old, but still goes over capacity practically hourly.

How hard is it to staff a team of engineers to get that damn site to be stable when they have 10's of millions in the bank?

---Thinking out loud---

There has been a significant evolution in the last 3-5 years respect to building and growing a company.

Google/Facebook/Twitter/Zynga [and others] are all direct competitors.

They all vie for the same thing [time/information/attention] of their audiences. There is no difference in what energy they need from their respective audiences in this matter; thus their business execution strategy requires vast capital to maintain their current hold on the slice of audience energy in the long term.

It also plays into how they are defensible. Twitter is taking an offensive position with its platform and how it treats apps built by the community. This money will likely be used to acquire and defend itself until it irons out is business model.

Zynga has been very silo'd in how it acts (their product originality issues aside) with respect to innovation.

Facebook has an incredible committed user base that is not going anywhere anytime soon.

Thus in the next two years, we will really see a battle on useful extensions (profitable extensions) of these platforms that are all competing for the same resources of their audience (attention and time).

So these companies all are hedging against coming innovation from each other with respect to how they will garner that audience attention.

The evolution that I mentioned then, is in that the aggressive manner in which these companies raise enormous funding is all based on their understanding that they really are competition in the information state, and it doesn't matter that one seems to be in a different space or appear to currently be dependent on one another.

I think we really are on a precipice with respect to the landscape of how people will primarily consume/contribute through their preferred sites.