Yext is an online yellow pages service that sells click to ads. The company claims that they have 20,000 customers are connected to Yext Calls. The company has raised $25 million led by Institutional Venture Partners. Sutter Hill Ventures also participated in this round of funding. Yext claims to be pulling in $20 million in revenues this year.
Yext was founded in 2006 and they have partnered with publishers by installing Yext Numbers. Yext Numbers is a local search monetization platform. Yext partners include YellowPages, Topix, and Local.com. Yext uses IBM’s speech-to-text recognition to keep track of calls for billing. Yext is led by Howard Lerman and Brian Distelburger. Distelburger was the COO of CDS and Lerman was the COO of Datran Media.
“We are confident that Yext will become a leader in local web-based advertising,” stated IVP General Partner Dennis Phelps. “Howard, Brian and Brent’s company has the potential to solve this huge problem by focusing on advertisers as users.” Phelps is now a board member at Yext.
Micro-blogging company Twitter.com is rumored to be closing a deal worth $100 million in venture funding. The rumor is according to a Wall Street Journal source. The investors involved are T. Rowe Price, Insight Venture Partners, Spark Capital, and Institutional Venture Partners (IVP). This is double the rumor that a TechCrunch source predicted earlier this month.
Spark Capital and IVP are previous investors in Twitter. In Twitter’s last round of funding, their valuation was $255 million. At an additional $100 million round of funding, the company is expected to be valuated beyond $1 billion. Despite the valuation Twitter has, the company does not have any substantial revenue model. But as we have learned from YouTube’s acquisition, that really doesn’t matter. YouTube was burning through VC funding before Google bought them out.
How many users does Twitter have? The company expects to have 25 million users by the end of this year. Twitter rival Facebook.com has about 300 million users. At one point Facebook made an offer to buy out Twitter for $500 million, $100 million in cash and $400 million in stock options. Rather than buying out Twitter, Facebook bought out FriendFeed.
There are only a certain number of start-ups that can walk around feeling like over a billion dollars or more. Facebook and LinkedIn are both in that club. And now Twitter will be joining the billionaire’s club in their next round of funding that will give them that valuation. Twitter co-founder revealed a new round of potential funding that will put them at a $1 billion valuation at an all hands meeting according to a TechCrunch source.
Twitter will raised $50 million to receive the $1 billion valuation. In the past Twitter had already raised $35 million from Benchmark Capital and Institutional Venture Partners. The $35 million round gave them a valuation of $250 million. Thus far Twitter has raised $55 million in funding. That should keep them going for a while despite not having a revenue model. The rumored investor in the upcoming round is expected to be New York based venture capital firm Insight Venture Partners.
The service that makes you blog at less than 140 characters and has built an ecosystem around it has raised additional funding. This round of funding is at over $50 million and is part of the third round.
This round of funding was put together by Benchmark Capital and Institutional Venture Partners. Considering Twitter’s 900% growth in a year, it is no surprise that these two venture capital firms wanted to be a part of it. Twitter wasn’t exactly planning on receiving additional investment since they still have money left over from previous rounds of funding. There could be a lot of money made for the VC companies if Twitter receives an acquisition offer for what they are currently being valuated at.
Facebook already reportedly threw a $500 million offer in their direction in the form of cash and stock, but Twitter decided to walk away. It may have been a good move since Facebook’s stock value has been fluctuating quite a bit between the internal numbers and the valuation that Microsoft based their investment on.
From a traction stand point, investing in Twitter makes sense. But many people are raising their eye brows based on the fact that Twitter does not have a revenue model. Many companies are starting to realize that just having advertising may not cut it in terms of a business strategy. I believe that if Twitter can ride through the recession they may not necessarily need a revenue plan. Why do I say this?
Here is a one word example: YouTube. Remember the time before YouTube got acquired for $1.6 billion? YouTube barely had any profit and was also being closely watched by major TV companies in terms of litigation. When Google bought out YouTube, Viacom quickly slapped them with a $1 billion copyright infringement lawsuit. Google still has trouble dealing with the monetization of YouTube. Google already knew this would be an issue at the time of the acquisition, but that did not stop them.
Now Google owns the number one video site in the world and has a hell of a marketing tool at their disposal. Google used YouTube to inform people about the Chrome web browser. Google Chrome gained quite a bit of market share for being a brand new browser.
This could be the same case with Twitter minus the litigation. Twitter is a major marketing tool that any bigger company could make tremendous use of. An investment in Twitter was probably the best that a VC could make right about now, despite the lack of a revenue model. No profit, no problem.
It seems like whenever a major event happens that shakes the blogosphere, the Twitter community is the first to respond. This is true for the Obama’s inauguration, the recent terrorist attack in Mumbai, the Hudson River airplane accident, etc. Twitter is also becoming a marketing tool for celebrities. Now that Twitter is garnering so much more attention, it is only natural for the company to raise more funding to keep the traction going.
A source at TechCrunch has it that Twitter has signed a term sheet with at least one venture capital company, including Institutional Venture Partners, to raise a new round of funding that will put the company at a $250 million valuation. It is pretty likely that the company will raise over $20 million in VC money. Last May the company raised $15 million and the year before that they raised $5 million.
The big question here is whether major corporations believe Twitter is worth at least $250 million. Apparently Facebook did as they offered the microblogging service $500 million in cash and stock options that Twitter reportedly turned down. Facebook’s actual value has been questioned multiple times by multiple companies so it was pretty logical for Twitter to hold off for now.
Another problem Twitter has is the lack of a revenue model. Twitter’s servers are being hammered by the five million plus users that they have. Of these millions of users, none of them have to pay to use the service. This is a niche that Yammer, an enterprise Twitter-like service, filled in. If Twitter begins to charge for premium services, then it is pretty likely that people will start paying because many of the users have already established a reputation.
One thing that is for certain is that this new round of funding will keep Twitter running through the weak economy and may see itself being acquired when the acquisition market begins to heat up once again.
Zynga is a social network game-making machine. The company has just raised $29 million from Kleiner Perkins Caufield & Byers, Institutional Venture Partners, Union Square Ventures, Avalon Ventures, and Foundry Group. Union, Avalon, and Foundry were all previous investors. Zynga is based out of San Francisco, Calif.
Zynga was started by Mark Pincus. Through this round of funding, Kleiner Perkins partner and former chief creative officer of Electronic Arts Bing Gordon will join Zynga’s board of directors. Zynga’s last round of funding was $10 million in January 2008. Reid Hoffman and Peter Thiel of the PayPal mafia were a couple of investors involved in the last round of funding.
Zynga currently has about 18 million uniques per month. Zynga’s revenue model is advertising and selling game add-ons. Zynga’s top games on Facebook are Poker, Blackjack, Scramble, Word Twist, PathWords, Sudoku, Sea Wars, Mafia Wars, Dragon Wars, Triumph, Attack!, My Heroes Ability, Ghost Racer, Dope Wars, and YoVille. Zynga recently acquired YoVille.
In September 2006, the month that Pulse 2.0 was created, I pointed out that New York-based Quigo was beefing up their client list and that in terms of advertising, the company would be able to compete with Google AdWords. Quigo Technologies is known for their AdSonar product. AdSonar provides contextual advertisements based on keywords from any given website, similar to Google AdSense.
Currently, Quigo provides services to ABC News, Hollywood.com, ESPN.com, Forbes.com, FOXNews.com, CareerBuilder.com, and USAToday.com. In June 2007, Time Inc. decided to choose AdSonar to power the advertising for their websites as well. Time Inc. is a subsidiary of Time Warner Company. Time Warner Company owns America Online. Technically, its a situation where the client wants to become the owner.
America Online is currently putting together a deal to acquire the advertising company for $300 million. Kara Swisher of AllThingsD broke the news.
“We have taken traditional consumer research to the next level. For the first time ever marketers can understand all aspects of consumer activity, including critical links between online and offline behavior,” stated Gian Fulgoni, Co-Founder of comScore. comScore is an Internet information provider that monitors consumer behaviors and trends online. comScore has a plethora of lucrative clients such as Verizon, T-Mobile, Viacom, AOL, iVillage, CareerBuilder, Microsoft, and Yahoo!. All of these clients benefit from the human-computer interactions monitored by comScore. It will be comScore, Inc. will be listed under NASDAQ: SCOR.
comScore was created in 1999 and had acquired assets from NetRatings during the dot-com bust. About 12% of comScore’s 2006 $66 million in sales came from Microsoft. The company is often times cited in the press for its statistical information. In a recent Bloomberg article, comScore statistics were used for reporting how many more visitors were attracted to YouTube this year compared to last. YouTube had 133.5 million visitors this past January and 9.5 million the January before that. comScore also reported that 94.8 million visitors visited the website this past January and 38.9 million the year before.
“We have taken traditional consumer research to the next level. For the first time ever marketers can understand all aspects of consumer activity, including critical links between online and offline behavior,” stated Gian Fulgoni, Co-Founder of 
