Twitter.com Gets An Early Christmas Gift
Well, it looks like all of Sarah Palin and Ashton Kuther’s hard work has paid off. It’s been reported in the past few days, after signing deals with Microsoft and Google, Twitter is officially profitable. The two search giants reached combined agreements worth $25 million which will make all ofTwitter’s content searchable.
According to investment sites like Bloomberg, Twitter will make a small profit this year off of these agreements. The deal with Google will generate about $15 million in revenue, while the deal with Microsoft (Bing) will pull in $10 million.
When one of Twitter’s investors was asked about how Twitter would make money, he replied, ” that is the stupidest question in the world.” He followed up saying, “it’s like asking, how was Google making money?”
Well, we know how Google makes money. They index a bunch of information and place ads next to it…while playing the Internet superpower game by buying up other online properties.
An online version of Axis and Allies.
Until now, Twitter, a company founded in 2006 and currently boasts 105 employees, is for the first time flirting with profitability. After raising over $155 million in venture capital…I think the idea of being “profitable” isn’t such a bad idea.
The micro-blogging service has also announced plans to place advertisements into the Tweets as part of it’s expansion and move towards increasing revenue. The following are some other ideas Twitter is tossing around to make some needed cash:
- Earlier in the year Twitter got behind the mashup that combines Tweets from top executives, which is sponsored by Microsoft.
- Another idea being spoken about is the use of paid accounts. (huh?)…that’s like paying to use Google. If they can’t capitalize on the need for real time data…I’m not sure what will work.
- Twitter Counter is an idea which charges users looking for followers and front page placement. This would be good for marketing companies which rely on data to spot trends.
Some of the justification Twitter has given for paid accounts, is the fact users may be able to “opt out” from seeing ads. However, I think this would be seen as an admission of guilt stating the ads are obtrusive. It’s not wise for them to come across sounding like the ads are a negative thing. Plus, for the search deals to continue being profitable, Twitter is counting on the masses to take up the service.
On the flip side, paid accounts might be a viable solution for executives, politicians, and other organizations needing access to API features and scalability.
With some saying Twitter has already peeked, and it’s simple business model being susceptible to competition, it would behoove Twitter to protect it’s brand. Of course anyone can create a service which allows micro-blogs being displayed to the masses.
However, the Twitter name will be what carries them into the next decade. Don’t get so caught up in “turning a profit” where you risk losing the user base, which will make or break your company. All it will take is a few Tweets about a new Twitter, and the Twitter revolution is over.
