Twitter Backlash Continues

Silicon Alley Insider conference highlights ongoing skepticism

Fortune isn't the only one picking on Twitter. The magazine's recent unflattering take on Twitter's growing pains seems to have unleashed a wave of anti-Twitter venom in the tech world.

"Most companies don't get murdered; they commit suicide," said Esther Dyson of EDventure, during a panel discussion at Silicon Alley Insider's Startup 2011 conference. Gilt Groupe CEO Kevin Ryan chimed in, saying the company hasn't proven it can execute.

Even Fred Wilson, whose firm, Union Square Ventures, is an early investor in Twitter, isn't exactly cheerleading. Also speaking at the SAI conference, Wilson noted that Twitter's $7 billion valuation on private secondary markets is "ridiculous." Its value wouldn't be so inflated if private market investors had a real understanding of how the company values itself, he said. 

Union Square Ventures led Twitter's first round of funding in 2007 and participated in subsequent rounds to maintain its ownership position. But the firm opted out of Twitter's September 2009 funding, which valued the company at $1 billion, which some speculated was the reason for Union Square's decision at the time. Twitter's latest internal valuation, which occurred in December when Kleiner Perkins Caufield & Byers invested $200 million into the company, was $3.7 billion.

Twitter skepticism persists despite the company's recent "CNN Moment," where it served as the primary news source for updates on the United States' killing of Osama bin Laden. The microblogging platform did not crash while hosting record-breaking usage volumes, a fact that came as a surprise to many and indicates how closely users associate Twitter's service with unreliability.   


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