UPDATE 3-Twitter snags $100 mln investment, new backers

* Twitter announces "significant" round of funding

* Says T. Rowe Price and Insight Venture Partners involved
(Recasts, confirms deal value)

By Alexei Oreskovic

SAN FRANCISCO, Sept 25 (Reuters) - Twitter nabbed $100
million in funding and a $1 billion valuation on Friday from
five firms including mutual fund giant T. Rowe Price (TROW.O),
as investors bet that the Web sensation's explosive growth will
yield actual revenue or a lucrative deal.

Investors including private equity firm Insight Venture
Partners took part in the latest round of funding, underscoring
growing interest in the three-year-old Internet microblogging
phenomenon despite its lack of revenue.

Twitter announced it had closed a "significant" round of
funding on the company's official blog. According to a person
familiar with the matter, the investors contributed $100
million in new funding, granting the company a $1 billion
valuation.

Twitter, which lets people send short, 140-character text
messages to groups of "followers," is one of the
fastest-growing Internet social media companies. Worldwide
visitors to its site hit 44.5 million in June, up 15-fold from
a year earlier, according to comScore.

But Twitter has yet to figure out how to make money from
the free service. Executives have cited premium features and
advertising as key initiatives to make money, though co-founder
Biz Stone told Reuters this week that Twitter would not take
advertising this year, despite widespread speculation that it
would. [ID:nN22356040]

"It is important to us that we find investment partners who
share our vision for building a company of enduring value,"
wrote Twitter CEO Evan Williams on the blog, noting Twitter
closed the round "a few hours ago."

The $100 million funding and the list of investors were
first reported in Thursday's Wall Street Journal.

The participation of T. Rowe Price, a mutual fund known
more for investments in public companies than in start-ups,
stirred speculation that Twitter could be moving toward an
eventual public offering or acquisition.

Some analysts believe Twitter could eventually be acquired
by one of the established Internet companies such as Google Inc
(GOOG.O), Yahoo Inc (YHOO.O) or Time Warner Inc's (TWX.N) AOL.
Earlier this year, Google CEO Eric Schmidt called Twitter a
"poor man's email."

San Francisco-based Twitter said the latest funding round
included T. Rowe Price and Insight Venture Partners, as well as
existing backers Institutional Venture Partners, Spark Capital
and Benchmark Capital.

The company has previously said that it intends to remain
independent. Past investors, according to ThomsonReuters data,
included Benchmark Capital, Union Square Ventures, Charles
River Ventures and Bezos Expeditions, which manages the
personal investments of Amazon.com chief Jeff Bezos.

A February round of funding, led by Institutional Venture
Partners and Benchmark Capital, had valued Twitter at about
$250 million. The pair jointly invested $35 million in Twitter
during that round.

A Twitter representative was not immediately available for
comment.
(Reporting by Alexei Oreskovic; Editing by Andre Grenon,
Richard Chang and Matthew Lewis)