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Twitter co-founders (from left) Evan Williams, Jack Dorsey, and Biz Stone. They've got major money, deafening buzz, and green statuary.
Facebook and YouTube have yet to gush profits - a fact that is the talk of Silicon Valley. Yet here I am again, in July 2008, listening to yet another boyish entrepreneur discuss a quirky, compelling - and nearly revenue-less - startup. I ask Dorsey, a 31-year-old NYU dropout whose slender build and mop of hair evoke the pre-psychedelic Beatles, when Twitter will start making money, known around these parts as "monetization." "We'll monetize when the time is right," he says, as the backfire of a motorcycle on the street below roars through the room's open windows. "We raised enough money [$22 million] to get to that point through experimentation.
Only in the tech business are companies born with neither a clear reason for being nor a clue as to how they'll produce profits. Then again, rejoice: The U.S. financial system may be imploding as you read this, but the Bay Area startup culture is alive and well. Oodles of Web startups are gaining traction which makes this a good time to examine the star of the class.
Thousands of people are doing that every day. According to comScore, Twitter had almost three million monthly users as of June, which is triple what it had last November. Those figures are probably low because they don't measure mobile activity, which is a large part of the Twittersphere.
In the midst of all that, Twitter raised a slug of new cash, landed its first acquisition, and repeatedly suffered embarrassing system outages. (Twitter embraces the outages with humor by posting an image of the "Fail Whale," a smiling cetacean held aloft by eight cheerful birds. It's better to laugh than to cry.) "Twitter is at the forefront of the real-time Web," says Fred Wilson, a Twitter investor and partner at Union Square Ventures. "Blogs were the beginning of that, a progression from the static Web. Now with Twitter and other services there is this notion of smaller and ever more rapid bursts of information."