Wired has just reported, in a piece on the rocket-ship microblogging service Twitter, that they will be bringing in revenue of “a modest $4 million or so this year.” After endless months of technologist babble over Twitter’s ability to monetize, it looks like they are finally turning on the revenue tap.
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Still, a total of four million dollars in revenue is paltry when stacked against the $100 million they recently raised. This corroborates my previous statements that Twitter’s VC valuation, and the numbers thought up by technologists were far out of the park.
The Wired piece is almost damning on the Twitter leadership, discussing how they feel blase toward making money and instead focus on “spend[ing] lots of time concocting schemes to boost the happiness quotient of a workforce.” Hardly what a hard-nosed VC would want to hear.
We are not sure exactly where this four million dollars in revenue is coming from, at least for the moment. However, we do have some speculation of our own. Twitter could be charging major platform operators for API access for their users. Perhaps when the allowed API hits per user went from 100, to 150, the creators of Seesmic and TweetDeck had to pay.
Or, perhaps Twitter is selling access to its streaming API. The Firehose level of the API, all tweets that are sent, is still so restricted that Twitter asks that you do not even request access to it. Something that high in demand could be sold for quite a sum. If Twitter found one major client for Firehose, that alone could fill the four million gap.
For now, the Twitter web interface is free of ads, although for some time, the Japanese specific Twitter website had advertisements. Twitter could perhaps be forecasting the four million, and might add in a few text links to juice up the cash.
However they are going to make the money, Twitter is about to finally bury the question that has so kept us chattering: how will Twitter make money?
You can read the whole piece here.