Twitter sees plenty of money in tweet flow

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February 13, 2015 12:52 AM

To Dick Costolo, there’s gold in them thar tweets, and Twitter has just begun to mine it.

To Dick Costolo, there’s gold in them thar tweets, and Twitter has just begun to mine it.

Costolo, Twitter’s CEO, enthusiastically sketched out on Wednesday many of the new revenue streams the company plans to tap. During a keynote address at a technology investors conference in San Francisco hosted by Goldman Sachs, Costolo did not break a lot of new ground, but he tried to paint a picture of a company that had finally gotten its house in order after a 2014 filled with executive firings, missed product deadlines and sluggish user growth.

Twitter’s core business of selling ads that are inserted into the flow of tweets that every user sees has plenty of room to grow, he said.

The social network’s ideal model is for ads to make up about one in 20 tweets that the average user sees — the same level that Facebook strives for. Costolo is eyeing video as another potential treasure trove. “Marketers like that kind of storytelling,” he said. And the shift to mobile video, which is also being chased by other tech giants like Facebook and Google, offers an easy way for internet companies to snag more of the ad dollars devoted to TV.

To better capitalise on the trend, Twitter recently released tools to make it easier to shoot, edit and post video directly from its mobile apps. And shortly before Costolo’s appearance Wednesday, Twitter announced it was buying Niche, a New York ad agency that specialises in helping popular content creators on Vine, Instagram and other visually oriented social networks to connect with brands that are willing to pay them to promote their products. Although Niche is still tiny, it takes a cut of the transactions it brokers, potentially offering Twitter another way to profit from advertisers’ rising interest in video.

It is also expanding its efforts to extend its reach — and sell ads — beyond its core base of 288 million monthly users, he said. A new partnership with Google to include tweets in web searches will also drive new traffic to Twitter’s service.

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