Twitter is closing a round of funding that will value the company known for its 140-character, stream-of-consciousness blogs at $1 billion, technology news site TechCrunch reported on Wednesday.

The company will raise around $50 million, and Chief Executive Evan Williams told employees about the funding round, TechCrunch said, citing multiple unnamed sources.

Twitter did not immediately respond to a call seeking comment.

A February round of funding led by Benchmark capital had valued the company at around $250 million, TechCrunch said.

Twitter and other social networking sites have been hard-pressed to show that they are viable businesses and that they have what it takes to eventually make a successful public offering or private sale.

Worldwide visitor's to Twitter's website reached 44.5 million in June, up 15-fold-year-over-year, according to comScore data. But the San Francisco-based company has only recently begun to focus on ways to make money from its free service.

When something like Twitter or Facebook becomes a cultural phenomena, it's much more than the sum of the parts. It's really tapping into a cultural shift, said Salil Deshpande, a general partner at venture firm Bay Partners.

As the network effect increases, the value increases, he said.

Twitter's Tweets are 140-character text messages published to subscribers known as 'followers', and the service has become a phenomenon among news junkies, Hollywood watchers -- and many investors.

Both U.S. President Barack Obama and Senator John McCain used Twitter to communicate with voters in the 2008 presidential campaign.

Twitter also has a real-time search engine that allows Web surfers to cull through the morass of Tweets and find the latest information about any topic being discussed by Twitter users. By comparison, Google Inc's search of the entire Web is based on slightly dated information.

Some observers have speculated that Twitter could eventually run ads alongside its search results, similar to Google's lucrative paid search business.

Last week, Twitter revised its terms of service to state that its service could contain ads that, among other things, target queries made through the services.

Google Chief Executive Eric Schmidt has referred to Twitter as poor man's email. Twitter's co-founder, Biz Stone, has said he would welcome any opportunity to work with Google.

(Reporting by Alexei Oreskovic and Peter Henderson; Editing Bernard Orr, Leslie Gevirtz, and Carol Bishopric)

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