India Internet News
Twitter To Generate Revenue From Commerce
20 July 2011
Tuesday, Twitter CEO told that the company could possibly produce income from commerce along with advertising, its current money-maker.
During his speech at the Fortune Brainstorm Tech conference held at Colorado ski resort, Dick Costolo also rejected about the reports of management uproar at the San Francisco-based company stating they are still looking for explosive growth. He said, "Along any axis you measure us we're growing faster than we've ever grown before. Twitter users are sending one billion tweets every five days and the service now has more than 200 million registered users."
Costolo refused to confirm whether Twitter, founded in 2006, is profitable; however he said the count of advertisers on the platform is 600 percent more this year compared to last year, when the number was in hundreds. He said, "The beauty of the Twitter advertising platform is the ads are just tweets. The ad system is organic to the platform." Twitter allows advertisers the ability "to edit and manage a campaign in real time and distribute it globally." "We've already seen that from (movie) studios. The week before a film comes out they're promoting trailers on Twitter," he added.
According to him, Twitter users are attracted towards advertisements on the service much more than they do with Internet search. He confirmed that, "Our engagement rates are through the roof, ads with clickthrough rates of 30, 40, 50 percent," and said 80 percent advertisers renewed their campaigns. He said advertising will be "one of the major revenue components for Twitter going forward," but "there is a commerce opportunity there for us to take advantage of." "We already see a tremendous amount of commerce taking part on the platform. We are thinking about the kinds of things that we will offer to the market and designing different things and experimenting with different things."
Costolo showed the case of a professional American football team that used Twitter to announce to fans that it had 1,000 tickets left for the next day's game and sold them in an hour. He inquired, "How can we remove friction from the process?". "Now you have to go to a third site, enter a promotion code... Classic economics -- good money to be made when you remove friction from transactions."
He also confirmed that although Twitter's two co-founders, Ev Williams and Biz Stone, have left it, but this does not mean that there were management issues in the company. "While people like to focus on the comings and goings of the founders... what's been really going on inside the company is we've been building out the senior management of the company."
In October, Costolo also took the place of Williams and become CEO of the company. He told that the procedure was almost complete but Twitter planned to employ a senior marketing executive soon. "It's one of the most powerful brands in he world already in its short life -- the bird is recognized around the world -- but we don't really have anybody internally curating that brand." Even he was asked about a US Federal Trade Commission probe into Twitter's dealings with third-party industries that made the applications for the service.
He assured that Twitter was cooperating with the US regulators and will "provide them with all the information they want." Twitter has recently started to develop its own tools to use the service, prompting some concern among developers whose products may be considered as rivals. He said Twitter wants to provide a "Twitter-owned and operated experience on all major platforms" but there will be a place for external companies to provide "value-added services for our core products."