The Motley Fool Previous Page

Twitter: 140 Characters at $1 Million Apiece

Tim Beyers
July 16, 2009

Hear that, Fool? It's the sound of Web watchers hyperventilating at the news that Twitter expects $140 million in 2010 revenue, up from zero dollars today.

Fiery adjectives punctuate most of the mainstream coverage -- particularly "crazy" and "impossible." But is it? Is Twitter just another loser-in-the-making with an Underpants-Gnome business model?

Only if you assume the company has no plan to make money. But that would be stupid. Proven investors such as Benchmark Capital's Bill Gurley don't place multimillion-dollar bets on companies that have no idea how they'll make money. He and his partners surely must be privy to a plan.

In fact, there are plenty of ways for Twitter to make money. Still my favorite option: a permissions-driven supplier of microtargeting data. Any company that recommends products, services, or entertainment could benefit from the conversational intelligence that Twitter provides. Netflix (Nasdaq: NFLX  ) and (Nasdaq: AMZN  ) spring to mind immediately, but hundreds of other businesses could also benefit. (Interesting tidbit: Amazon's Jeff Bezos is also invested in Twitter.)

At the very least, Twitter could help shape advertising strategies on other platforms -- a service similar to what Akamai (Nasdaq: AKAM  ) offers right now. Google (Nasdaq: GOOG  ) an