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Twitter CEO Predicts Revenues in '09

SAN FRANCISCO - Can Twitter survive? Can it make money? The questions are about as common these days as stories about the micro-blogging service's popularity.

If you're asking Twitter's CEO and co-founder, Evan Williams, here's your reply. "We've moved revenue higher on the list of priorities," Williams said. "We're looking at getting revenue in Q1."

In a wide-ranging interview with Kevin Maney, contributing editor of Conde Nast Portfolio Magazine, at a Churchill Club event here last night, Williams said Twitter has been focusing on growth up to now, and not as focused on revenue. But the recession has forced it to rethink its plans about bringing in more dollars.

Advertising is one of many possible revenue generators, Williams said, adding that Twitter generates enough Web traffic to pay its bills by inserting advertisements in feeds. But Williams said the company's looking at other options.

These include working with corporate users selling products over Twitter, and companies using the service as part of their marketing communications channel. "Every day we talk to large companies," Williams said. "I'd take a lot more of these meetings if I had time, they're trying to figure out social media and Twitter's on their list."

The recession has forced Williams to rethink his approach. "We had planned to focus on revenue in 2010 but that's no longer the case, so we changed the plan quite a bit," he said. "We've moved revenue higher on our list of priorities and I'm trying to manage things now so we won't have to raise money in 2009."

It's all about the dough

So far, so good in raising money this year. In June, it added two new investors, Amazon.com's (NASDAQ: AMZN) Jeff Bezos and Spark Capital's Bijan Sabet. Existing investors Union Square Ventures and Tokyo-based Digital Garage, which partners with Twitter in Japan, also kicked in money.

Williams did not discuss figures, but did say Twitter raised more than expected and that set it up very well to weather the current economic storm. One report by GigaOm pegged the amount Twitter raised at about $15 million.

Despite the increased emphasis on making money, growth will remain a major focus. "The feedback I get from my board and employees is, this is awesome, let's see how far we can go," Williams said. Twitter is hiring more staff.

Perhaps some of them may be on the business side. "We're 25 people, 75 percent of whom are focused on engineering and operations, and we have no business people in our company," Williams said.

He also predicted Twitter will become really big. "I've been working on Internet startups for at least 15 years, and I worked on Blogger, one of the top 10 sites on the Web, for at least six years," Williams said. "Twitter will dwarf that and the goal is to realize that opportunity."

Williams' one fear is competition, and rightly so. Already, several competitors have sprung up in the United States, including Plurk, Pownce, which SixApart just bought and plans to shutter, Yammer, and Jaiku, not to mention hundreds of micro-blogger sites in Europe and China.

However, the Twitter CEO is more concerned about major companies like Microsoft (NASDAQ: MSFT) and Yahoo (NASDAQ: YHOO) muscling into his turf. Google bought Jaiku in October last year.

"Our threat is people who now see the concept that Jack [Dorsey, who built the service and was Twitter's first CEO] thought up and the team helped implement, and think they can do that better and they can kick our butt," he said. "We're still tiny compared to the big guys."

Asked about Facebook's failed attempt to buy Twitter ($500 million in stock plus cash, according to reports), Williams said the talks fell through because the time was not right for the deal. "I feel very strongly that Twitter has huge potential," he said. "To sell it right now, even at a good price, would be a little disappointing."

Never say never

However, Williams left the door open for resuming talks in the future. "I like Mark [Zuckerberg, Facebook's CEO] a lot, and there's some shared philosophies and the strategies discussed made sense," he said.

Facebook may not be the only company seeing Twitter's potential. Williams hinted that other companies may be making offers for Twitter, but declined to comment on this further.

The terrorist attack on Mumbai last week heightened fears that Twitter could become a terrorist tool, a point raised previously in an addendum to the 304th Military Intelligence newsletter earlier this year.

Williams waved away these concerns when discussing the Mumbai attack. "People got the notion that there was a media blackout and people and terrorists were getting their information from Twitter," he said. "That doesn't make much sense. Why would you assume that more information flow would be better for the bad guys than the good guys?"