Pat Dollard

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Buzzle.com:

Among people who ‘Tweet as they think’, one of the most tweeted questions is – ‘How does Twitter make money?’. For most web users who are regular users of Facebook and other monetized websites like Google, the fact that there are no visible ads on Twitter, tends to be quite surprising. Trade analysts who have been watching the website develop since its founding in 2006, have been predicting the eventual monetization strategy of Twitter for years. Finally, Twitter has launched its advertising strategy and is finally ready to tap its commercial potential. The aim of writing this article is to satiate your curiosity about how does Twitter make money currently and talk about its possible revenue generating plans for the future.

About Twitter

Twitter was launched in July, 2006 by Biz Stone, Jack Dorsey and Evan Williams as a microblogging site, with the idea of creating the ‘SMS of the Internet’. Before venturing into a discussion about its monetization, let me briefly explain how does Twitter work. It is designed as a microblogging and social networking site with a difference. Every short message (with a maximum length of 140 characters) published by a Twitter user is known as a ‘Tweet’ and it’s broadcast to all users or a limited number of users (called followers). Every message can be republished or ‘Retweeted’ by any user.

All the tweets are searchable on the website and now they even feature in search results of Google, Yahoo and Bing. Twitter has truly triggered a microblogging revolution of sorts and is fast gaining popularity as a platform to voice your opinions to the world. Despite of having 65 million tweets generated per day and approximately 190 million users today, Twitter’s monetization plans started only recently, since 2010. Let us see how does Twitter make money by enabling users to transmit their thoughts world over like an Internet SMS.

How Does Twitter Earn Money?

Twitter has finally launched its revenue generating model and businesses can leverage the power granted by this microblogging site to promote their products through advertising on Twitter. Here are two primary ways in which Twitter is currently generating revenue.

Twitter Feeds on Google, Yahoo & Bing
One of the first revenue generating opportunities for Twitter was created through deals with Google, Yahoo and Bing, who bought the rights to display live Twitter feeds in their web search results. Twitter earned millions of dollars in revenue by selling the rights to publish live tweets on any trending topic. It’s a win-win deal, as it brings more users to Twitter and provides search engine users with live data.

Promoted Tweets, Promoted Trends & Promoted Accounts
The major revenue generating model for Twitter now is its ‘Promoted Tweets’ advertising model. Advertisers pay for promoting Tweets related to their product. Any search query related to the advertiser’s product will be listed at the top of the search results. Also the name of the company promoting the Tweet is displayed below it.

Then there is the related concept of ‘Promoted Trends’, where the advertiser’s product related trends are prominently featured on the website. Twitter has also created ‘Promoted Accounts’ for advertisers, which will be shown in the ‘Suggestions for you’ section, presented for Twitter users to follow. This advertising model is expected to increase Twitter’s revenues to up to $125 million in 2011. Companies like Coca Cola, Disney and Starbucks have already made deals with Twitter for promoting their products.

So now that your query about how does Twitter make money, has been answered, you may study how your business can benefit from its advertising model. While Twitter keeps growing and adding new users everyday, its revenue generating potential is only going to rise with time. If it keeps growing at the same rate, eventually Twitter will go past the billion dollar mark in revenues as its monetization plan goes in full swing and gains popularity. As of now, the promoted Tweets and search engine feeds are the prime revenue generating mechanisms for Twitter.

For more information regarding advertising on Twitter and how to use the leverage provided by the website to promote your business product, visit the business site of Twitter.
By Gray Pilgrim
Last Updated: 9/26/2011

Second story from Did You Wonder.com:

Twitter.com claims to be a microblogging and social networking website with ‘a difference’. The idea behind twitter is simple – express your thoughts in 140 characters at a time; similar to a mobile SMS. Each internet ‘SMS’ is called a ‘Tweet’, and is published to a list of users known as followers. Thousands of people ‘tweet as they think’ , and one of the most tweeted question is ‘how does twitter make money?’

Twitter has indeed revolutionized the world – voicing your opinion was never so easy. Just say it out loud to the world. Say what you have to according to the changing trends. Osama bin Laden killed? Voice your opinion on it. Who should win the next Football world cup? Say it out loud, and the world will listen to you.

Those who use Facebook.com or some Google product, can visibly identify the ads placed on various locations of the webpage, and through these they generate revenue. But Twitter? Not a single ad on any page – quite surprising! How to they earn?

Before we get to that, it is important to stress that all tweets are searchable on the website, and they feature in the search results of Google, Bing, and Yahoo search engines. Hint hint – Yes, Twitter sells it’s tweets related to a particular topic to these search engines, and that’s one way of making money. Twitter sells the rights to publish live tweets on any hot, trending topic (for example, the Football world cup, or The Royal Wedding of William and Kate). Search engines get live data, and unique comments through each tweet. As a by-product, Twitter gets more users. An ideal win-win situation!

Another money-generating model is to show “Promoted Tweets”. Advertisers pay Twitter to show their tweets in top search results, along with their company name. Likewise, there are “Promoted Trends” where How Does Twitter Make Money? The advertiser’s product related trends are featured on the website. Major companies like Coca cola, Starbucks, and Disney have already made deals with Twitter to promote their products.