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July 20, 2011

Commerce Could Provide Twitter with New Revenue Stream: CEO

By Beecher Tuttle, TMCnet Contributor

It's amazing to think how much Twitter (News - Alert) has grown since co-founder Jack Dorsey sent out his first tweet more than five years ago. The micro-blogging site currently handles around one billion tweets every five days and attracts more than 400 million unique visitors to its website each month. In addition, usage of Twitter's mobile client grows approximately 40 percent each quarter.



While these jaw-dropping statistics are indeed astounding, they underscore a long-running problem: Twitter hasn't been very good at making money.

The answer to this predicament is advertising – which is rapidly growing on Twitter – and leveraging the social media site as a commerce platform, CEO Dick Costolo (News - Alert) said keynote interview at the Fortune BrainstormTech conference in Aspen, Colorado.

Costolo explained that Twitter can be used as an extremely unique sales channel where companies can reach consumers directly. He referenced a situation where the San Diego Chargers jumped on Twitter to sell 1,000 football tickets in a short period of time to avoid a television blackout.

“There's a commerce opportunity there for us to take advantage of if we want,” Costolo said, according to Fortune's Dan Primack.

The most glaring issue with Costolo's example is that Twitter didn't make a dime from the Chargers.

“How can we remove friction from the process?” Costolo asked.

The answer to this question is unclear, but Twitter's new CEO did suggest that the micro-blogging site could have improved the sales process by allowing users to make purchases directly through the platform, rather than forcing them to head to the Chargers website.

Twitter actually tried its hand at being a commerce platform back in 2010 when it launched its daily deals site, Early Bird. The discount wing of Twitter folded just a few months after its launch due to a mediocre following and generally subpar deals, according to Business Insider.

Whether Twitter finds any success with a commerce model or not, the company's chief revenue stream will continue to be advertising. Costolo told the New York Times that the number of advertisers paying to use Twitter has increased seven fold this year.

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Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.



Edited by Jennifer Russell
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