Microblogging service Twitter has reached profitably for the first time thanks to deals with Google and Microsoft.
Syndication deals made last year with the two companies have brought $25 million to Twitter, in return for allowing tweets to be displayed in Google and Bing search results. At the time it was uncertain whether this would result in profitably for Twitter, as the company’s annual costs were estimated as between $20 and $25 million.
In December, BusinessWeek reported that Twitter has secured a small profit for 2009 through these deals, the first in the company’s three-year history. Although the exact amount has yet to be disclosed, an anonymous source cited by BusinessWeek claims that the company maximised their profits by streamlining costs via renegotiating deals with telecom companies for text-message tweets.
As well as finally establishing the viability of Twitter as a profitable social media start-up, these deals have benefits to Microsoft and Google. Adding the data and information from Twitter presents both companies with new options for generating revenue through search engine marketing.
The deals give their search engines access to the twitter datastream. Now, user tweets will be placed in search results, and their content crawled for data. BusinessWeek proposes that twitter is a valuable source of information on products for many consumers, with many users sharing their opinion of services and goods online via the micro-blogging service. The publication proposes that using this information, Google and Bing will be able to sell more PPC advertising around these results, and users will see more relevancy in their search results.
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