Close Gets Funding to Make Open-source Twitter Variant’s plans to build an open-source alternative to Twitter got a vote of confidence this week with an investment from the VCs at Montreal Start Up. While the amount of the financing wasn’t disclosed, Montreal Start Up Managing Partner John Stokes said the firm invests between C$150,000 ($120,135) and C$400,000 ($320,329) per deal.

A bigger question is why microblogging companies are getting any investment at all. If Twitter can’t find revenues with the vast majority of market share, why would an open-source version make money? founder and CEO Evan Prodromou says open source gives the company “commercialization options that Twitter doesn’t [have].” For example the company can charge a fee for public or private implementations, or be the basis for microblogs on other web sites. has some other tricks up its sleeve, too. Their APIs are Twitter-compatible, so they should work with third-party features like search, hashtags and analytics. And it’s a federated model: You can run an instance privately, or share messages with other servers. That allows hybrid public/private deployments that may sit better with enterprise customers.

Yammer and have gone after those enterprise customers, and Socialtext recently added a Signals function for employee messaging. But’s taking a different path. “I don’t want to be a tiny company where we get paid for 100 percent of the installs, but have a tiny base,” said Prodromou. “I’d much rather see tens of millions of installs, and make conversions off a relatively small percent of them.”

Nor is Prodromou fazed by the Twitter imitators. “I think we’re over the hump of the yet-another-micromessaging-tool wave of the summer of 2008,” he said. “The more people know about Twitter, the more entrepreneurs and CIOs there are looking for a platform like ours on which to build.”