After Facebook and Livejournal, Russia buys Twitter

The Russian investment fund Digital Sky Technologies (DST) is continuing to surprise the world Internet market. The fund’s acting director, Yuri Milner, recently told a reporter from Britain’s Sunday Telegraph about DST’s plans for the future. DST has earmarked $1 billion for its next stage of investments.

DST is now looking into several dozen companies as potential investment projects. Milner would not give the names of the companies, but did say that the geography of DST’s interests is very broad, including Australia and Asia. And he did not rule out the purchase of stock in Twitter.

100 million users do not bring revenue

Twitter appeared in 2006 and was originally conceived as a project that would help people to answer just one question: “How are you?” But very soon those short messages (“Tweets”) of no more than 140 characters were enormously popular. Today the site has more than 100 million registered users.

Unexpectedly Twitter has become a new-generation means of exchanging information efficiently. This was proved, for instance, by the protests against the last presidential elections in Iran. At the time the simplest way to get news from Teheran was by means of Twitter. And during the recent micro-revolution in Kyrgyzstan, micro-bloggers got information out much more quickly that the traditional media.

The service’s owners are now testing possible models for the site’s monetization.

The Internet as a means of saving money

Yuri Milner did not mention a possible time frame or the sum of money involved in a deal with Twitter, but he did share his view of the Internet of the future. “The Internet is penetrating all branches of the economy,” said Milner. “And that is forever. Music will never be the way it was, neither will the newspaper business. Independently of what happens on the macroeconomic level, the Internet is continuing to change the world.”

“Everything that you do in real life, you can do more cheaply over the Internet,” Milner added. As an example, he mentioned the dating sites where people can meet without having to pay for dinner in a restaurant: “I met my girlfriend at a fitness center, but that is not a sensible way to meet given that a membership can cost $1,000 a month.”

Twitter in addition to Facebook and ICQ

DST has already made a number of sensational deals. In 2007 it acquired 2% of the social networking site Facebook for $200 million. Since then DST has bought up stock belonging to minority shareholders so that now its share of the Russian Facebook has grown to 10%. In April 2010 DST bought ICQ, the instant communication service that has become popular in Russia.
DST takes pride in the fact that 70% of the visits to pages in the Russian Internet are thanks to Digital Sky Technologies, whose potential audience is estimated at 300 million people. If the economical Milner can convince those users to shell out even $10 a year, he will pocket an instant $300 million. But the monetization of free services in the Internet has yet to take root, so the object of his fashionable purchases is not entirely clear.

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