We have a running discussion at work, generally brought up by Ben after a Twitter related story breaks. This is that Twitter’s great and all, but it doesn’t make any money. Our generally agreed assumptions have been that Twitter is free-loading off the back of Venture Capital and will flop as soon as it’s left on it’s own, since advertising revenue probably couldn’t support it.
It seems we may be wrong. According to a report by Business Week, Twitter will be reporting a small profit for 2009. It has done this by cutting costs, such as carrier charges for it’s SMS services, and by generating new revenue via it’s deals with Google ($15M) and Microsoft ($10M) for their search integration.
I have to say, I’m impressed. I didn’t catch on at the time that they’d make a lot of money from that, but if the deals have given them the ability to fund their entire yearly operating costs, good work to them!
