The Rise of the Twitter Hangers-On: CoTweet Raises $1.1 Million

Last Updated Jul 9, 2009 2:10 PM EDT

Whenever another company which is living off the host that is Twitter gets funding, my eyebrows raise just a bit. In pure business terms, this is about as meta as it gets: a company receives funding to propagate a business off of another company that makes no money -- unless your definition of making money is so broad that getting money from venture capitalists counts.

To continue to follow (pun intended!) my "host" analogy, the bacterium of the day is CoTweet, which manages corporate Twitter accounts for other companies, including Starbucks, JetBlue and Microsoft. It just raised $1.1 million from v.c.'s including Founders Fund and Baseline Ventures to expand its product, which does things like allow multiple users at a corporation to tweet to a single account in a coordinated fashion. (In the Twitter-verse, that level of funding is middle-of-the-road. According to research published last month by Chubbybrain, a total 11 startups has received $23 million in funding for their Twitter-based businesses, the average being $1.9 million and the median being $850,000.)

So, guess what? For now, CoTweet isn't charging these corporations, just like Twitter (which apparently has funding from one of the v.c.'s that just funded CoTweet), although it plans to start doing so relatively soon. Twitter, which -- famously -- doesn't have a business model yet, has also said it might charge for corporate accounts. So, if I'm doing my back-of-the-envelope calculations right, a company that used CoTweet to Twitter could potentially be paying both CoTweet and Twitter for the privilege. Something tells me that this should all ... just ... be ... simpler.

(In other failure-to-monetize news, IAC Corp. chief Barry Diller apparently is "pessimistic" about Twitter making money, per The Wall Street Journal's Julia Angwin, who is covering this week's Allen & Co. confab in Sun Valley, Idaho where Diller is speaking. The good news is that Warren Buffet said he would pay $5/month to subscribe to YouTube. Hallelujah!)

Previous coverage of Twitter on BNET Media:

Compete: Twitter Passes New York Times Twitter's Rapid Adoption by Small Business The 12 Ways Twitter Will Transform the Media Business