Your tweets: worth $25m?

Posted 22 December 2009 09:20am by Patricio Robles with 5 comments

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When Twitter signed deals with Google and Microsoft giving the two technology giants full access to its stream of tweets, it was clearly a big deal for Twitter and created a lot of discussion about the future of search.

Some reported that the deals would earn Twitter modest amounts: a few million bucks each. But nobody knew for sure since Twitter is a private company.

Now BusinessWeek is reporting that the deals were actually a bonanza for Twitter worth $25m, $15m coming from Google and $10m coming from Microsoft. BusinessWeek's sources are anonymous, and since no official statements about the value of the deals have been made, we don't know for sure.

But assuming for a moment that BusinessWeek's report is accurate, the amounts paid by Google and Microsoft would seem to indicate that the two companies see Twitter data's as being very valuable, lending credence to the notion that real-time search is the next big battlefront in the search wars.

More remarkable than the numbers BusinessWeek is reporting is another claim: thanks to these deals and reduced expenses, Twitter is now profitable. For a company that has raised more than $100m since its founding in 2007 and that many questioned would ever generate substantial revenue, profitability on any scale would be a pretty big deal.

Of course, the real question for a profitable Twitter: can profitability be scaled and sustained? A lot of companies have benefited over the years from substantial payments guaranteed by deals with Google and Microsoft (Facebook, MySpace and Digg being three notables). Those, of course, related to advertising, which is different. But for Google and Microsoft to get the most out of Twitter's data, they'll have to figure out real-time search. If Danny Sullivan's analysis of Google's real-time results in the wake of the death of actress Brittany Murphy is any indication, there's a lot of work to do.