Twitter Finally Earns a Profit, After Scoring Search Engine Deals

December 21, 2009

(ChattahBox)—Twitter has skyrocketed in popularity, since its inception in 2006, putting it in the top three of the most used social networking sites. But for all of its acclaim and more than 58 million global monthly users, the micro-blogging site was unable to turn a profit, until now. According to a report in Bloomberg on Monday, Twitter stands to earn a small profit at the end of 2009. The change in Twitter’s fortunes can be attributed to two Internet search deals the company struck with Google and Microsoft Corp. in October.

According to sources within the company, Twitter stands to earn about $25 million from the search engine deals. The deal with Google reportedly generated about $15 million, with the Bing deal bringing in about $10 million.

The agreements will bring in a small profit, on top of Twitter’s operating costs of about $20 million to $25 million a year.

Biz Stone, the company’s co-founder declined to comment on specifics of the firms finances, but he noted that 2009 was a good year. “We’re thrilled about the partnerships we’ve formed this year and we’re looking forward to opening Twitter even more in the future,” wrote Stone in an email.

Next on the horizon is advertising. As Twitter’s up-to-the-minute data becomes more valuable to search engines, advertisers are anxious to partner with the micro-blogging service. But Twitter executives don’t want to rush into advertising deals that would take away from the current Twitter experience.

Chief Operating Officer Dick Costolo said: “We want to do something that’s organic and in the flow of the way people already use Twitter — and not, ‘Here’s the tweets and here are the ads.’”

Twitter also plans to charge a fee for commercial Twitter accounts sometime next year, which would bring in another revenue stream for the firm.

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