Twitter’s price for Tweets: $25 million
The last time the world had a look at Twitter’s financial books, the company was targeting a meager $400,000 in revenue for the third quarter of 2009 and $4 million in the fourth quarter.
But that information was based on documents stolen from Twitter by a hacker and republished by the blog TechCrunch.
And it was before Twitter, the popular microblogging service that allows users to broadcast short, 140-character text messages across the Internet, had inked monumental deals with search giants Google and Microsoft.
The companies have kept mum about the financial terms of the deals, which will allow Tweets to appear in Google and Microsoft’s search results. But people familiar with the situation have told Reuters that money did change hands as a result of the deals and the blog AllThingsDigital previously reported that the search deals could be worth several million dollars apiece.
It turns out the search deals were worth $25 million, according to a report in Business Week on Monday. Google coughed up $15 million and Microsoft paid $10 million, the report said, citing two anonymous sources.
The deals will allow Twitter to finish 2009 as a profitable company, and comes amid ongoing efforts at the company to cut costs.
Twitter declined to comment on financial terms of the deals.
That’s an important validation for Twitter, which recently raised $100 million in financing at a $1 billion valuation, but whose money-making potential has until now been a purely hypothetical exercise.
The search deals provide a nice financial foundation for the company. The question now is whether will Twitter be solely dependent on Google and Microsoft for its livelihood, or if the company can develop its own revenue-generating businesses, such as advertising and premium services, to provide a new source of growth.