PMG Digital Made for Humans

Twitter Turns Six, Reliable Twitter Revenue Model Turns Zero

4 MINUTE READ | March 20, 2012

Twitter Turns Six, Reliable Twitter Revenue Model Turns Zero

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Kerry Dean

Kerry Dean has written this article. More details coming soon.

Happy Birthday! You should see the toast. I couldn't even get it through the door.

Happy Birthday! You should see the toast. I couldn’t even get it through the door.

Happy Birthday, Twitter! I can’t believe it’s been 6 years already. I remember riding in a cab in San Francisco back in 2007, and the two people I was traveling with were constantly messaging on their phones. “It’s called ‘tweeting’, Kerry. It’s not text messaging. We’re on Twitter. It’s awesome. You should try it.” And then I looked down at my Sprint flip phone that I bought in 2004. That phone could barely even make a phone call – much less run any cool Twitter apps! There was no way I was going to be able to join them on Twitter. Cue the Forever Alone meme.

Two years later, I joined Twitter. I have about 100 accounts now. A few of them have over 10,000 followers. Obviously, I love Twitter. I’m definitely an over-tweeter. I tweet about everything: SEO, music, WWE pay-per-views, food, etc… In fact, I can’t imagine my life without Twitter any more. It’s like trying to think about how awful the Internet was with a dial-up connection. If I woke up tomorrow and Twitter no longer existed, I’m pretty sure I’d instantly sink into a massive depression. It would be like a bad break-up…but the kind where the other person shows up to your place when you’re not there, takes all their things, moves out, and leaves a Post-It note to inform you that they are gone and never coming back. Yeah, it would be that sad.

But alas, Twitter is still alive and kicking after 6 years! AWESOME! And the best part is that they have over 140 million active users sending 340 million tweets per day. BTW Twitter currently has over 500 million total users. I’m in SEM, so I’m supposed to have a Twitter account. (Side note: If I were the official King of SEM, I would decree that all SEMs would henceforth be issued a Twitter account upon their entrance to any SEM career. But I digest…). Nowadays, my non-SEM friends have Twitter accounts. It’s awesome. I especially enjoy the Tweets from my musician friends who are out really late at night. Funny stuff happens at bars and clubs, and I’m glad that I get to hear about it now. Thanks, Twitter!

One question that has been popping up probably since the very first tweet ever – “What is Twitter’s revenue model?” That’s a really good question. Sure, they make money, but as for a reliable revenue model…well…that’s a mystery. A recent article on Gawker really pulled back the curtains on Twitter’s financial history:

“To collect total revenue of $28.5 million in 2010, for example, the company had to spend and write off more than three times that, leading to a net loss of $67.8 million, according to new financial data on the company provided by our source.  And 2011 hardly got off to a more promising start: Twitter posted a net loss of $25.8 million on revenue of $23.8 million through April 30, according to the same source.”

The article goes on to describe Twitter as “the biggest blown business opportunity in media or tech.” That’s harsh.

Personally, I’m an optimist, and I’m sure that my optimism have given me rose-colored glasses. I’m optimistic about Twitter’s future, and I think I have reason to be hopeful. Recently, Twitter rolled out self-service ad campaigns. Twitter’s ad revenue in 2011 was almost $140 million. It’s projected to grow to over $259 million in 2012. This new self-serve ad platform will help fuel that growth, which has been estimated to hit $1 billion by 2016.

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Well. All I can say is, “Happy Birthday, Twitter.” I’m going to keep on tweeting for as long as I can. So here’s to another 6 years…and to making some ad revenue.

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