A lot of banter and rumination going on at the moment pondering Twitter’s (rumored) $100M fund raise at a $1B valuation.
Chris Dixon, in particular, has written a thoughtful post on what the deal says about the state of Venture Capital.
I won’t get into that one, preferring to focus instead on what Twitter could possibly need $100M of additional funding for.
For Twitter (and Twitter's investors), this financing makes a lot of sense if one assumes that they roll up the choicest portions of the third-party twitter ecosystem into their core (through M&A), refine their API approach to this newly aggregated/federated platform and then cultivate a deeper, richer ecosystem around same.
Then, when the tree needs a good "pruning" again, they can start the M&A process anew.
Simply put, the sheer openness of Twitter’s API and ecosystem approach has led to the “blooming of a thousand flowers,” as hundreds of application developers find the goodness in piggybacking off of Twitter’s real-time messaging infrastructure, brand equity, user base and single sign-on support.
The opportunity for Twitter is to pick from the best, brightest and most synchronous, and role them into their platform to:
A) Make a better platform
B) Enrich user engagement
C) Fortify their monetization/business picture
After all, even the best gardens must be pruned from time to time.
(Side note: TechCrunch has a good post, ‘The Future of Twitter Visualized,’ that incorporates a couple of really good “connect the dots” graphics from Steve Rubel and Brian Solis.)