Josh Halliday
guardian.co.uk, Wednesday 25 May 2011 17.34 BST

Twitter on Wednesday confirmed the acquisition of the London-based startup TweetDeck in a deal thought to be worth about $40m (£25m).

The deal makes Iain Dodsworth, the 36-year-old founder of Twitter app TweetDeck, an overnight multimillionaire and an instant success story from London’s “Silicon Roundabout”.

Dodsworth, a Sheffield Hallam University-educated programmer, also confirmed the long-rumoured deal on his company’s website on Wednesday.

“I am extremely happy and proud to let you know that TweetDeck has been acquired by Twitter. We completed the deal on Tuesday and are now in the process of ‘joining the flock’,” he said.

“The past three years have been an epic journey, with many highs and lows, accompanied by the constant thrill of never really knowing what to expect next. We’ve grown from one team member and a single user, to a team of 15 and a user base of millions.”

Dodsworth said the three-year-old TweetDeck will remain on London’s Old Street, dubbed Silicon Roundabout, where many of the capital’s most enterprising internet firms are based.

More than 20 million Twitter users have downloaded TweetDeck, making it the second most-popular way to use the service, after Twitter.com. The TweetDeck app allows users to organise their Twitter feeds and their profiles on other social media networks such as Facebook in once place.

Dick Costolo, the chief executive of Twitter, described the third-party application for “power users” of the social network site as a “groundbreaking” tool.

He added: “This acquisition is an important step forward for us. TweetDeck provides brands, publishers, marketers and others with a powerful platform to track all the real-time conversations they care about. In order to support this important constituency, we will continue to invest in the TweetDeck that users know and love.

“TweetDeck is a great example of a third-party developer that designed tools for the incredibly important audience of Twitter power-users and, in turn, created value for the network as a whole. As Iain’s journey suggests, there is significant opportunity for developers who deliver insights that foster a more engaged Twitter user base.”

As the popularity of Twitter has grown – it now has more than 175 million registered users – the San Francisco-based social media company has embarked on a ruthless bid to control third-party applications such as TweetDeck.

The aggressive drive was reported to have sparked a bidding war for TweetDeck earlier this year, with the third-party apps firm UberMedia apparently offering $50m for Dodsworth’s software. UberMedia owns rival third-party apps UberTwitter, UberCurrent and Twidroyd.

Since its modest, “friends-only” launch in 2008, TweetDeck has raised about $3.5m in funding. Its investors include Betaworks, TAG, SV Angel and PROfounders.