How can a company with no known business model raise $100 million from respected investors such as T. Rowe Price (Nasdaq: TROW)? That's the question I find myself asking, after a Wall Street Journalblog reported that Twitter is raising $100 million from as many as seven investors.

I see two possibilities. Either:

Many people work for, work with, or invest in Twitter (and that number is expanding). To date, no one has definitively said what the Twitter business model will be.

Internal documents released by a hacker to TechCrunch in July showed that Twitter expected 25 million users and $4.5 million in revenue this year. The revenue expectations follow a hockey-stick growth curve going forward, with $140 million in revenue projected for 2010. So what could the secret business model be?

The possibilities are endless?
The documents from a strategy meeting present such business options as verified commercial accounts, which Twitter identified as the "fastest way to make money without putting a whole organization behind it." Other possibilities included "Search/content ads, sponsored tweets, Adsense widgets." However, each of these was just a possible idea thrown out during a brainstorming meeting.

The closest thing we have to an insider account comes from Todd Chaffee, a Twitter board observer and general partner at Institutional Venture Partners, an investor in Twitter. In an interview with The New York Times, he speculated that e-commerce would play a role. Mr. Chaffee said, "As people use Twitter to get trusted recommendations from friends and followers on what to buy, e-commerce navigation and payments will certainly play a role in Twitter monetization."

While Twitter won't become the next eBay (Nasdaq: EBAY) or Amazon.com (Nasdaq: AMZN) overnight, this looks like the most likely road to widespread monetization at the moment.

Another possibility is the "freemium" model, in which basic free services are offered to all users, who then have the option to upgrade to paid premium accounts for more data and features. The problem with this model, though, is that most users are notoriously unwilling to pay for premium accounts. And Twitter documents show that the company expects as much, saying that the "majority of users [are] not monetizable."

Sellout?
The business model also could be irrelevant for the time being if Twitter were acquired by a Microsoft (Nasdaq: MSFT) or Google (Nasdaq: GOOG) and allowed to focus solely on increasing its dominance of the micro-blogging space. Continued...