Investors seem as keen as ever to pour money into Twitter, even though they are still without much of a business plan and revenue stream, with current the current valuation of the company around $7 billion.
Over the last couple of years Twitter has moved out of the jokes stage, when it was generally maligned for the place where people talked bout what they had for breakfast, into the real-time mass communication tool used across the world both in the Arab uprisings and yesterday a Twitter Townhall meeting with US President Obama at #AskObama. It has become the way millions of people communicate on a daily basis, and integral to media and PR on the web, as well as celebrity brands and customer service – it is a revolutionary equalizer.
But, and this is a very big but with a $7 billion valuation, they have still not found a good way to monetize this service. They have introduced lucrative in-stream ads, but the income from those streams barely makes a dent in their current outgoings on their technology infrastructure. Some users seem open to the possibility of paying for an ad-free service, and there is money to be made in analytics – something Twitter has appreciated with its recent acquisition of BackType – but the question remains if all this will ever add up to profitability.