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Andreessen Horowitz invests $80 million in Twitter, whose private stock is hotter than ever

February 9, 2011 |  6:10 pm

Andreessen Horowitz may be a relatively young venture capital firm but it's already a trendsetter.

That's why it caught Silicon Valley's attention Wednesday when it invested $80 million in Twitter. Netscape co-founder Marc Andreessen's firm got the stake in the microblogging company by buying stock on secondary markets. It did not participate in Twitter's recent $200-million funding round led by Kleiner Perkins Caufield & Byers, which valued Twitter at $3.7 billion.

Twitter Twitter is one of an elite bunch of fast-growing Internet services including Facebook and Zynga that have gained mass appeal. With investors bidding up those privately held companies, already rich valuations have only been getting richer.

Twitter has earned even greater cachet as Facebook and Google have each looked at buying the San Francisco company. Twitter CEO Dick Costolo has said he is not interested in selling Twitter and is focused on building its advertising business.

But the valuations discussed are eye-popping: between $8 billion and $10 billion, even as Twitter still works on turning its more than 200 million registered users into a large, profitable independent business, according to the Wall Street Journal.

A lot of hot air? Expect the talk of a technology bubble to soar just as high as these valuations.

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Twitter CEO Dick Costolo is determined to get the last laugh

-- Jessica Guynn

Illustration: Jon Krause

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