Twitter to nab VC funds?

The social network for spewing random thoughts is on the road to raising its first round of venture funding.

Twitter, the social network for spewing random thoughts to friends via digital messages, is on the road to raising its first round of venture funding, company cofounder Biz Stone said this week.

It would seem that investments in Web 2.0 companies are still feverish, considering that Twitter is not yet profitable and about 8 months old, according to Stone. Even though the social network has garnered much attention recently--Presidential candidates John Edwards and Barack Obama are active Twitter heads--the number of people actually using the service isn't a whole lot.

According to research firm ComScore, the service attracted about 226,000 unique visitors in May, up from 94,000 visitors the previous month and down from a peak of 397,000 in February. (Twitter launched last winter, was officially founded in March, and then was later spun out from Obvious.) That's less than a drop in the massive buckets of Facebook and MySpace, which drew 26.6 million and 51.4 million, respectively, in May.

Still, Twitter is concentrating on growing its network of users before worrying about making money, Stone said while speaking at a NASA-hosted event on Web 2.0 technologies this week. (The company doesn't have an obvious business model.)

Part of that growth might be fueled by third-party mash-ups sites like Twitter Fan Wiki and Twittervisions, a site that shows "tweets" in text bubbles from locations on a 3-D map of the world. Stone said that he's found that users like to read messages from Twittervisions more than from Twitter.com. That could be a good or bad sign, depending on how you look at it.

If astronauts started using the service to report on space junk or what they had for lunch--an idea that was floated by NASA officials at this week's meeting--that might help Twitter's viral growth. But that could be a long way off.

Stone wouldn't divulge which investors the company is in final talks with, citing a desire not to squelch the deal. But the company has operated so far on seed money from Twitter's other founder Evan Williams, who also started Pyra Labs' Blogger and Obvious.

Could Google, which bought Blogger in 2003, snap up Twitter before the investment deal is done?

 

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