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.
In addition to advertising, Twitter gets millions of dollars from Google and Microsoft Corp. to show tweets to users of their search engines. Twitter does not disclose its financial information, but those distribution deals, worth about $25 million, were enough to make it profitable in 2009.
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.