Twitter plans new revenue model

Twitter users have increased 900 per cent in the last year, according to the firm

Twitter is to start creating products that will bring it more revenue, after reportedly raising $35m (£24m) in funding from US venture capital firms Benchmark and Institutional Venture Partners.

The micro-blogging site said in a blog post that it had not actively sought the funds, but that investors were attracted to the firm because of its strong growth. Twitter users have increased by 900 per cent in the past year, according to the post.

However, although Twitter is growing at a phenomenal rate, the site has had trouble monetising its web traffic and there has been plenty of debate surrounding its revenue model.

Twitter said that the new funding, which reports argue will increase its valuation to $250m (£175m), will allow the company to start building " revenue-generating products", although it did not disclose what these might be.

"Our relatively small team of 29 employees has accomplished quite a bit lately, but it's obvious that we have the world ahead of us," said Biz Stone, Twitter co-founder, in the post.

Twitter's profile on the web has been rapidly increasing in recent months. The site gained international recognition when the plane that landed on the Hudson River last month was first captured on camera by a Twitter user and spread around the globe in seconds.

High profile individuals joining Twitter, such as US president Barack Obama and actor Stephen Fry, are also likely to have helped the site gain traffic. Twitter also hosted a festival in 175 cities around the world last week to bring together its communities and to raise awareness for charity: water.

"Twitter is making a real impact around the world as people, companies and organisations everywhere discover a powerful new way to communicate," said Stone.

"With these new partnerships and this new funding, we are in a position to move more confidently toward our vision for a robust and successful Twitter."