Twitter App Investors Still Writing Checks: StockTwits Raises a Round
by Peter Kafka
Posted on May 18, 2009 at 3:00 AM PT
Nope, Twitter still hasn’t trotted out a business model yet–a couple of sponsorships from the likes of an AT&T (T) don’t cut it. And that may or may not be a problem for potential acquirers like Google (GOOG) or Microsoft (MSFT). But it’s a nonissue for a growing number of start-ups hoping to succeed simply by positioning themselves in Twitter’s general vicinity.
Today’s example: StockTwits, a day trader-meets-Twitter site that just raised $800,000 from venture capital firm True Ventures. It’s not a ton of money, but StockTwits doesn’t need a ton of money. The site, which launched last fall with an $800,000 angel round, employs all of four people.
And it’s yet another bet that investor Howard Lindzon has made in Twitter: He’s also put money into bit.ly, a Twitter-centric url-shortner, and Tweetdeck, a useful Twitter client, alongside incubator Betaworks, which in turn invested in the StockTwits angel round. Cozy! (Cozier: Lindzon was an early investor in Silicon Alley Insider, my former employer).
Like all of those companies and just about every other company that’s trying to make money from Twitter, StockTwits doesn’t have any kind of formal relationship with Twitter. It doesn’t need one: If you want to take advantage of Twitter’s data and users, you can just plug right in for free via its open API.
As a wise man once said: “All of [these companies] are part of the burgeoning ecosystem that revolves around Twitter, which powers all of their companies by letting them plug into its data stream. In exchange, all of these companies make Twitter more successful, by bolting on frills and features to its bare-bones service.”
Name aside, StockTwits may be less dependent on Twitter than any of the other Twittery start-ups. StockTwits users employ Twitter to pass along investment ideas, but beyond that, it’s a fairly straightforward stock message board, the kind we’ve seen since the first Web boom.
Lindzon and co-founder Soren Macbeth plan to make money via ads and by publishing newsletters/blogs on behalf of some StockTwits users, (two of whom are already selling their investment advice for $60 a month). Basically, Twitter is a lead-generator for the site.
Come to think of it, that could be a business for the Twitter team. Right?
Here’s a video interview I shot with Lindzon last week in which he declined to hand out any stock tips of his own. Presumably he’ll rectify that today.
