Twitter's Hidden Revenue Stream: How The Social Media Firm Plans To Turn Every Tweet We Post And Everything We Reveal About Ourselves Into Big Profits
When Twitter Inc. recently filed for its initial public offering with the U.S. Securities and Exchange Commission, a lot of space in its Form S-1 was dedicated to demonstrating the company’s successful advertising platform, which isn’t surprising given that advertising accounted for roughly 85 percent of its $316.9 million in revenue in 2012.
Twitter kept the reporting about the other 15 percent of its sales, or $47.5 million, discreetly tucked away within the S-1. That money is generated by the licensing of its massive quantity of data to analytics companies -- a side business that, although not as sexy or profitable as advertising, has the potential to grow into a huge revenue stream for Twitter.
Since the first tweet was sent on March 21, 2006, by Twitter co-founder Jack Dorsey, also the co-founder and CEO of the privately held Square Inc., Twitter users have posted more than 300 billion messages of 140 or fewer characters. Those tweets have been about literally everything, and each one contains valuable information about the user’s interests, physical location and when the tweet was sent.
Think about it: Millions of people publicly announce their personal interests in succinct detail, frequently with links to a diverse array of other people with their own specific interests, including their own followings and followers and a record of when and where the pronouncements were made. And it’s all presented in brief and often cross-referenced summaries.
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