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Rumors earlier this week of Twitter negotiating a new round of funding at a valuation of $1 billion are confirmed today by co-founder Evan Williams on the Twitter Blog. TechCrunch reports this latest round of funding has closed with Twitter receiving $100 million.

Twitter’s previous round of funding raised $35 million in February of 2009 at a valuation of $250 million. The new figure of $1 billion quadruples Twitter’s valuation in just 7 months.

Keeping in the spirit that you have to spend money to make money, Twitter has yet to produce a viable revenue stream. We anticipate that this $100 million injection is contingent on Twitter rolling out a paid advertising platform in the very near future. It’s worth noting that Facebook received $716 million in funding before finally announcing, less than two weeks ago, the company is now cash flow positive.

Evan William thanks Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, and Morgan Stanley as contributing investment firms. Twitter to date has received $155 million in venture funding.

Sources: Twitter Blog, TechCrunch

The top story on the social Web this week is Facebook’s acquisition of social media aggregator FriendFeed. The transaction is reported around $50 million. FriendFeed’s traffic is an estimated 1 million visitors per month which is minute compared to Facebook’s 250 million. With a recent Facebook valuation of $10 billion though, the numbers make sense.

Forrester Research analyst Jeremiah Owyang says it was “a good move for Facebook,” but it may have been a little premature for FriendFeed. “They could have given it a couple more years. With some marketing, they could have developed into a viable social media competitor,” says Owyang.

Others seem to have a difference of opinion. PC World reporter David Coursey states, “Purchasing FriendFeed, which seemed to be going nowhere, seems like an enlightened act of charity. The four … former Google stars that founded the company get a graceful exit from FriendFeed and an excuse when the service eventually shuts down.”

In my opinion this was a win-win situation for FriendFeed and Facebook; a lucrative deal for FriendFeed’s former Google engineer founders; and Facebook scoops up a so-far proven service that contains valuable insight into social media features that Facebook has yet to explore on it’s own platform.

Digital Sky Technologies, a Russian investment firm that recently purchased a 2% preferred stock stake in the Facebook social media company is looking to acquire an additional $100 million in common stock shares. The $200 million agreement in May of this year valued Facebook at approximately $10 billion.

The deal this week for current and former Facebook employees is offering $14.77 per common stock share which carries a lower valuation of $6.5 billion. This is not to say that Facebook is now valued at $6.5 billion, rather that common stock does not offer the same privileges and guaranties for shareholders as preferred stock. “If the Facebook employee has been locked up several years, it’s a good opportunity for them to sell some shares and get some liquidity,” says Stuart Campbell, a lawyer with Davis Wright Tremaine LLP in Seattle who focuses on startups.

Facebook board member Marc Andreessen last week stated he expects company revenues to reach $500 million in 2009.

Rival platform MySpace finally lost traction to Facebook in the United States this May based on comScore traffic statistics. Facebook has been the number one social network in the world for over a year now.

Source: Bloomberg

Facebook board member Marc Andreessen in a Reuters interview stated that he anticipates the social networking giant to reach $500 million in 2009 and billions more in five years. “There’s every reason to expect in my view that the thing can be doing billions in revenue five years from now,” Andreessen said.

The core source of Facebook’s revenue is engagement advertising however the company has been actively exploring alternative revenue streams such as virtual currency as a way of monetizing Facebook applications.

Andreessen also made news this week announcing a new $300 million technology venture capital fund with partner Ben Horowitz. The new VC firm appropriately named Andreessen Horowitz will focus on startup companies targeting the Internet, cloud computing, software, networking, and related industries.

Source: Venture Capital Dispatch

Yesterday Facebook accepted a $200 million dollar offer from Russian Internet investment group Digital Sky Technologies. The deal values Facebook at $10 billion and gives Digital Sky about a 2% preferred stock stake in the company. Only a year and a half ago a funding round with Microsoft valued Facebook at $15 billion, which may have been the “absolute peak of the market,” according to Facebook CEO Mark Zuckerberg. Depressed economic conditions today are sure to play a role in the declining valuation.

This investment could bring additional value to the Facebook brand with the extensive knowledge that Digital Sky has of the Russian and Eastern European markets.

Early last week we reported that Facebook turned down a $200 million dollar offer with a valuation of $8 billion. The terms of that deal included a seat on the Facebook board of directors. Our sources did not state where the offer had come from, but this Tuesday’s acceptance by Facebook could very well be that same deal renegotiated.

Recently Facebook reportedly turned down $200 million in funding at a generous valuation of $8 billion because of the stipulation that a board of directors seat come along with the deal. Mark Zuckerberg is serious about keeping control of the board which he currently holds three common stock seats, one for himself, one for Marc Andreessen (co-founder and chairman of Ning) and the last of which is currently empty.

The latest financial projections from Facebook show that the company estimates revenues of $550 million in 2009, nearly double their 2008 revenue of $280 million. While some consider these estimates to be a stretch, they most likely attributed to the $8 billion valuation in the recent offer (still a far cry from last round’s $15 billion valuation).

Source: TechCrunch

nGenera, developers of Collaborative Enterprise Management (CEM) software, announced that it has secured $10 million in a Series C round of funding, with Foundation Capital and Oak Investment Partners as participants. nGenera’s goal with this new financing is to increase product development and expand sales.
 
According to “Collaboration and Web 2.0 Technology Adoption, Q4 2008,” a Forrester Research report, over 60% of surveyed firms plan on implementing or upgrading their collaboration software with the next 12 months. Supporting this conclusion is further research, “The State of Real-Time Collaboration” in 2009 which states that seven out of ten firms surveyed plan to invest in enterprise collaboration solutions in 2009.
 
Source: nGenera Corporation Secures Series C Funding Round