Over the last year or so, everybody has been wondering about how Twitter manages to survive without monetising the site.
For their part, Twitter has been talking about starting premium accounts for businesses that use Twitter, and they have recently rolled out a service called Contributors to help these businesses. So far, though, there has not been much in terms of visible monetisation.
However, it turns out that Twitter has already made a profit for the year 2009.
Bloomberg has revealed that according to some reliable but undisclosed sources, Twitter earned $25 million this year from the search deals they made with Google and Bing.
According to the terms of this deal, messages posted on Twitter will be included as part of the search results on both Google and Microsoft’s search engines whenever they are relevant.
Google is believed to have paid Twitter $15 million for this facility, while Microsoft has supposedly paid $10 million.
The major expenses Twitter incurs are from payments they make to telecommunication companies to distribute tweets to all their users, and employee salaries.
Twitter has cleverly managed to bring down the telecommunication costs because of their growing popularity, so now employee salaries are the largest expense they face. If they limit the number of personnel they employ, they will continue to be profitable.
The total of these expenses in 2009 was between $20 – 25 million, thus allowing Twitter to show a small profit in their account books for the year.
It is not currently known whether the deals with Google and Microsoft will provide a continuous stream of revenue or not. Moreover, if they intend to grow, Twitter will have to seriously continue to look for other ways to monetise their site.