Twitter search deals generate big profits

Monday, December 21, 2009

Twitter has made $25m (£15.5m) from deals signed with Microsoft and Google to display its micro-blogging content in search results.

The company received $15m (£9.3m) from Google and another $10m (£6.2m) from Microsoft, according to a report in BusinessWeek citing two people familiar with Twitter's finances.

"The deals were huge," said one of the sources. "A lot of revenue came in."

Twitter announced the deals with Google and Microsoft's Bing in October.

"We have a team focused on delivering value from a search and discovery perspective at Twitter, and they're just getting started," said Twitter co-founder Biz Stone in a blog post at the time.

"Twitter is earning a reputation for delivering real-time results to queries about things that are happening right now."

Twitter is a private company, so its financial information is not publically listed and the reports are unlikely to be officially confirmed. Twitter, Google and Microsoft could not immediately respond to requests for comment.

The large profit Twitter has made from the deals is significant because the firm has always had trouble making money, so much so that Stone said last month that he may approach the stock market for funding if the site fails to generate sufficient revenue next year.

However, all recent news considered, Twitter's potential for revenue growth next year looks positive.

The firm has started to announce revenue-generating products, such as Account Verification, as well as venture capital deals and a new advertising strategy that will be rolled out next year.

Evaluations in September valued the firm at $1bn (£620m) after a $50m (£31m) cash injection from Insight Venture Partners.



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