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Twitter has a business model after all — and one that it’s betting may go from bringing in $400,000 this quarter to $1.54 billion in four years, according to documents leaked earlier today.
Projections that distant are not particularly useful, but they give a hint of Twitter’s ambitions. The company has been mum so far on how it plans to monetize the rapidly growing user base for its site, which had about 37.3 million worldwide visitors in May according to a Comscore report.
“Going from zero to $100 million in revenue is certainly possible but is probably a stretch from a sales execution standpoint,” said Josh Stein, a managing director at Draper Fisher Jurvetson. “If Twitter has 50 million users, they need to figure out how to bring in $1 to 2 per user.”
Twitter has outsourced some of that sales execution work already to blog advertising network Federated Media Publishing, which has done some one-off marketing partnerships for the site. They’ve included projects like ExecTweets, which compiles tweets from top level business executives and BingTweets, a Microsoft-sponsored Web site that markets their rebranded search engine.
“With these partnerships, there’s a lot of intellectual activity that goes into helping brands figure out how to engage in the social media space that can’t be automated,” said Matthew DiPietro, Federated Media’s director of marketing and communications.
These efforts are a start, but they’re probably not the key to revenue growth that could support Twitter’s burgeoning user base, let alone more than $1 billion a year. Some other obvious paths include selling ads against Twitter’s search results.
Co-founder Biz Stone also said that the micro-blogging site was going to go after giant brands such as Starbucks and Whole Foods by helping them find ways to better connect with customers.
Indeed, Twitter has proved to be a valuable listening tool for companies to figure out what customers want. Companies can respond to unhappy customers individually or study large batches of data to figure out how the public feels about a particular brand or product. For example, market research firm Conversition Strategies, which launched a sentiment analysis tool called Tweetfeel last week, said it helped Estee Lauder figure out why customers weren’t buying a battery-operated mascara liner through searching tweets.
“People were tweeting that they were afraid they would poke their eyes out,” said co-founder Jean Davis. “Twitter is still in its infancy. A lot of our clients are trying to figure out what to do with this data.”
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