Twitter financing values company at $3.7 billion

SAN FRANCISCO (Reuters) - Twitter has raised $200 million in financing in a deal that values the microblogging company at $3.7 billion, less than a year after it began its first serious efforts to make money.

Twitter CEO Evan Williams speaks at a news conference as the website is launched, in San Francisco, California September 14, 2010. REUTERS/Robert Galbraith

The investment came from Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers and existing investors, Twitter said.

The money will help Twitter grow the company, Twitter said in a post on its corporate blog on Wednesday. The blog post did not elaborate and a spokesman declined to offer specifics.

Twitter, which had 175 million users as of September, is among the new crop of quickly growing Internet social networking services. Others include Facebook and Zynga.

The company added two new board members -- FlipBoard Chief Executive Mike McCue and DoubleClick CEO David Rosenblatt.

The moves come two months after the four-year-old company handed the job of chief executive to Dick Costolo, the architect of its new advertising efforts, a sign that making money is a priority for the service.

Costolo told Reuters in May that Twitter planned to have hundreds of advertisers using its ad system by the end of the year. He said the company’s previous valuation of $1 billion meant that it was incumbent on Twitter to develop a business that can generate hundreds of millions of dollars of revenue.

Twitter had raised $160 million in four earlier funding rounds.

Technology blog AllThingsDigital first reported the $200 million funding round. It said that Kleiner Perkins beat out Russian investment firm DST Global. The Twitter spokesman confirmed that the figures were accurate.

Twitter, which allows users to send 140-character text messages, or Tweets, to followers, is one of the Web’s most popular social networks, and is challenging established Web services like Google Inc and Yahoo Inc.

Investors are watching the service closely, hoping one day to buy public shares of the company.

Reporting by Alexei Oreskovic. Additional reporting by Jim Finkle. Editing by Robert MacMillan