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November 25, 2009

Despite declining traffic, Twitter eyes acquisitions

Twitter, the social network phenomenon famously in search of a revenue model, wants to spend some more money.

In a recent interview, Biz Stone, co-founder of Twitter, said the company is interested in making more acquisitions going forward, Reuters reports. Referring to the 2008 purchase of search engine Summize, Stone said, "We made an acquisition last year that turned out to be an outstandingly good decision." Although Stone didn't provide details on prospects, he noted, "As our attention is grabbed by some of these developers, we will take a hard look at them."

So how is a social network with no discernible business model planning to pay for and sustain these future acquisitions? Well, Stone said the company's long-rumored business model will be taking shape in 2010, as the company plans to release details on how it will generate revenue through "non-traditional" advertising. Likewise, he noted that the company still has plenty of money in the bank, thanks to its hefty investor support.

Much of Twitter's future may depend on partnerships. Last month, Twitter reached separate deals with both Google and Microsoft that will let the search engines integrate Twitter updates into their results pages. It also forged a partnership with LinkedIn that lets users link their accounts on both services. Stone says he hopes to partner with more websites, and eventually roll the Twitter service out in languages other than English.

Of course, such lofty plans may prove premature if Twitter can't find a way to maintain its popularity among users. Recently, traffic to Twitter.com has started to decline month over month. New data from Nielsen shows Twitter traffic dropped 27.8 percent between September and October, bringing it down to 18.9 million unique visitors, according to eMarketer.

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