Peter Kafka’s latest article over on AllThingsD (a must-read for me) caught my attention quickly. He found that the amount of investment cash flowing into “pure play” Twitter startups fell to $10.4 million for the June 2009-to-May 2010 period … from $21.6 million the previous year. The 52 percent year-over-year decline probably feels like a shock to the system, but it looks like there are some clear drivers for this change.
Kafka cites the natural ebb and flow of venture capital deals, as well as Twitter’s rush to fill gaps in its services. The latter, to me, is a no-brainer, as I remember trying to keep up with it. During last spring’s Chirp conference, Twitter announced a number of new measures that rounded out its product set. Of course, it came at the expense – whether Twitter wanted to admit it or not – of the many companies that had arisen as a result of the market opportunities created by Twitter’s gaps.