twitterprofitable header Twitter is Profitable to Everyone

By Ethan Lyon, Senior Writer

Twitter has struggled for a long time to find a profitable business model. The wait is finally over and the microblogging site has turned a profit. Twitter will make search deals with Google and Microsoft’s Bing for $25 million.  The deal will make tweets searchable by both search engines — Google will generate approximately $15 million and Bing will fetch $10 million.

While Twitter is only now seeing the fruits of their labor, entrepreneurs and companies have been monetizing millions of Twitter users for some time now. Recently, Dell surpassed $3 million it made by using Twitter earlier this year to reach an astonishing $6.5 million through business referrals. Beyond business referrals, sponsored tweets and direct advertising have been profitable revenue streams for many companies. Here are ways companies are making money from Twitter’s users:

Business Referrals

Dell is seeing profits increase in lock step with their rise in popularity on Twitter. Brand Republic reported, the Delloutlet account (@Delloutlet) has recently grown from 640,000 followers to 1,468,249. Over $1 million has been made from @Delloutlet referrals for their “certified refurbs, scratch and dent and previously ordered new Dell products.” Furthermore, Dell’s Twitter operation in Brazil @DellnoBrasil has turned a profit of $800,000 in eight months. Twitter is a powerful business referral tool. For those influencers — like Dell — at the upper echelons, referrals can generate significant revenue. While you might not see direct revenues from your Twitter account, business referrals can make a significant impact on your bottom line.

Sponsored Tweets

More direct ways of making money have been through sponsored tweets. Essentially, a company leverages your followers to increase their brand awareness and traffic referrals through your tweets. Twitter has arguably become more of a “spammy” site due to these techniques. Furthermore, the FTC’s blogging crackdown takes aim at these often times elusive practices. To create more transparency in sponsored links, Brian Solis suggests incorporating “$,” “spon” and “paid” into endorsements. Twitter still remains very much like the wild west — with little order or regulation.

Direct Advertising

Banner ads generate profitable revenues on blogs and online news publications, why not Twitter? Magpie & Friends has built an advertising platform that pays users to sell their tweets. Very much like Google AdWords, there is a bidding system whereby advertisers bid on keywords they want to associate with their ads. The Wall Street Journal discusses the main challenge of advertising on social media in general: “If advertisers can tap into its network free of charge, why would they pay the company to do so?”

Magpie – Join the Conversation from Magpie & Friends Ltd. on Vimeo.

Twitter finally joins the ranks of its social media peers, (i.e. Facebook and MySpace) in turning a profit. “Until earlier this year, Twitter wasn’t even focused on revenue — let alone profit,” writes Bloomberg.com. Instead it was focused on making the best possible product. Moving forward, we look forward to seeing Twitter grow into not only a better microblogging site, but a profitable one.

* Sparxoo is led by social marketing experts.  Please contact the Sparxoo team for a free consultation.

Image by Pierre Amerlynck from Stock.Xchng