News: New Twitter fundraising seen at $7B valuation

06 July 2011 03:09 PM CDT

Ok, so Twitter is raising a bunch of money at a high valuation.  Good for them.  Could be an indication that the technology market is a bit frothy right now and Twitter is doing the smart thing by securing funds when funds are cheap and available.  Good for you, Twitter.  There's also the possibility that Twitter is actually profitable and growing and doing well.  I read an article the other day positing that Twitter is actually quite profitable.  I can't remember all of the juicy details, but it went a little something like this.  On the revenue side Twitter has several sources.  First, they have the "Firehose." Twitter has charged Bing and Google around 1 million each (annually) for real time access to Tweets (the "Firehose").  Unfortunately for Twitter, Google will let their "Firehose" subscription expire because Google intends on using it's new social network, Google+ for real time social content for Google search.  Second, there are Promoted Trends.  Promoted Trends cost up to 1,000 per day.  The article I read says that Promoted Trends are currently sold out.  That could mean a lot of daily revenue for Twitter.  Finally, there are Promoted Accounts.  You see Promoted Accounts whenever Twitter recommends someone to follow.  Often times that recommendation has come at a price charged to the specific brand or individual.  So, there you have it, three pretty decent sources of revenue for Twitter.  To cut to the chase, the article I read estimates the revenue side to be 1 million annually vs. expenses of \ million.  Not bad.

For reference, here's a link to the article I've referenced regarding Twitter's profitability: "Twitter is Obscenely Profitable."