The FINANCIAL — Twitter has made $25m (£15.5m) from Internet-search deals signed with Microsoft and Google to display its micro-blogging content in search results.
An agreement that made Twitter’s messages searchable on Google’s site will generate about $15 million, said the people familiar with the matter, who asked to remain anonymous because the terms aren’t public, according to Bloomberg. A similar deal with Microsoft’s Bing search engine will earn Twitter about $10 million.
The multiyear agreements will allow Twitter to make a small profit in 2009, said the people, who estimate that its operating costs are about $20 million to $25 million a year, the same source reports. The San Francisco-based company, which started in 2006, has about 105 employees, according to its Web site.
Like many social media startups, three-year-old Twitter focused early on adding subscribers rather than generating revenue. That's left many analysts and investors wondering how and whether the company—often cited as a candidate for an initial public offering or acquisition—would make money, Business Week reports. Twitter co-founder Biz Stone declined to comment on the company's finances, but wrote in an e-mail that the company is proud of the work it accomplished in 2009. "We're thrilled about the partnerships we've formed this year and we're looking forward to opening Twitter even more in the future," Stone wrote.
In exchange for making short blogs, known as tweets, searchable on Google, Twitter will receive about $15 million, the two people say, adding that the Microsoft partnership is worth about $10 million, according to the same source. "The deals were huge," says one. "With two scoops of the pen, a lot of revenue came in."
Twitter announced the deals with Google and Microsoft's Bing in October, v3.co.uk reports. 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.
Tweets also are a source of product information, with shoppers using Twitter to share views on their purchases, according to Bloomberg. Making that kind of information available on Google and Bing may help them sell more advertising, and provide more relevant search results to shoppers.
Twitter, which started in 2006, has raised about $155 million in venture capital. A round in September for $100 million valued the company at $1 billion, according to a person familiar with the deal, the same source reports. The size of the valuation, along with Twitter’s lack of a revenue plan, was reminiscent of the dot-com era, David Garrity, principal at GVA Research LLC in New York, said at the time. Since then, Twitter has given more details about how it plans to make money. In addition to the search deals, it’s planning an advertising program for early next year. The company also will charge for commercial Twitter accounts, which would let businesses analyze tweet traffic.
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