Elon Musk has taken over X (formerly Twitter) for one year, and we have seen furious changes very fast. A new user tire has been proposed by Musk in which people have to pay 8 dollars for the algorithm boost per month. A Paywall feature is also a thing now on Twitter.
Moreover, rumors of paid direct messages will be there in the future are circulating worldwide. Aren’t these facts interesting? This setup is about “How does Twitter make money?” in detail. To know everything about Twitter financing, keep reading further:
Table of Contents
Twitter on the rolling ball
Noah Glass and Evan Williams created an audio blog named AudBlog, which eventually became Twitter in 2006.
However, there is no need for any introduction to Twitter. A decade ago, its founder, Jack Dorsey, gave his first Tweet, “just setting up my twttr” on a micro-blogging site.
From that time until now, everyone and famous personalities have been on Twitter. It grows through millions of monthly active users reaching. The rants of current American Prime Ministries are very controversial. Moreover, we are still figuring out what #Covfef means. Thus far, all the glory is coming to its doom at a snail`s pace. Twitter’s revenue change has been the same for years and is expected to be profitable again.
From getting on the rolling ball, Twitter is still just trying to keep the ball rolling.
Twitter Business Model
Similarly to other social network business models, the Twitter business model also requires people to make a profile where people can share short tweets of up to 280 characters, videos, pictures, and links of the tweets. Videos have become more engaging than text, so 70% of the shared revenue of Twitter is shared with the creators. It is better than YouTube for daily active users.
Moreover, it brought the National Football League to the United States for 10 million US Dollars in 2016. To upgrade its business model, Twitter needs executive digital rights for big events like the National Football League, Award ceremonies, Political debates, etc. It can boost its revenue even more than Facebook and YouTube by working on the costs.
Twitter Partnerships And Acquisitions
Before progressing, knowing about Twitter partnerships and acquisitions is important. Some of the acquisitions are mentioned below:
- Crashlytics for 100 million US Dollars in 2013
- Gnip For one hundred thirty-four million US dollars in 2014
- Magic Pony Technology for one hundred fifty million dollars in 2016
- MoPub Advertising Solutions for three hundred fifty million dollars in 2013
- Periscope for one hundred million US dollars in 2015
- TapCommerce for one hundred million US dollars in 2014
- TellApart for four hundred seventy-nine million dollars
- Vine for thirty million US dollars in 2013
- Zipdial for thirty million US dollars in 2013
Twitter Makes Money From Advertisement
85% of Twitter’s revenue is through advertising services. According to the report, the annual revenue of Twitter through advertisement was four hundred million US dollars. Any company or individual can advertise on Twitter by either:
- Advertising a tweet to other people around Twitter.
- Advertising an entire account.
- Advertising a trendy hashtag according to a specific event of the time.
Before 2013, people had to go to the link for any picture or video, but advertising services can grab more users through direct videos and pictures posted with a text tweet. According to the engagement, Twitter charges from the advertisers per tweet or click.
Twitter Makes Money From Firehose
Firehose is data Twitter sells to companies, around five hundred daily tweets from active users. Those companies use this data to study the consumer in detail and the trends of the time and generate insights with data analyzing tools. Those are said to be sophisticated enough. This is data that a data partner can access. This is also known as data licensing, which has been more profitable than advertising revenue. Twitter generated thirty-two point two million US Dollars in 2015 through data licensing.
Twitter In Lose
In 2021, Twitter made two hundred and twenty million net loss on five billion dollars in revenue.
However. In 2022, two hundred and seventy million dollars in net loss on one point seventeen billion in revenue. Moreover, To find a profit margin (net income/revenue) x 100%, which is going in lose.
In April 2022, in a TED Interview, Elon Musk stated that this purchase was not for economics. Rather, it was for civilization’s purpose that there should be an inclusive platform on which everyone can trust.
He also previously said that he tried to be out of the deal many times unsuccessfully after looking at the company`s book. So, it was a selfless motive for this deal. We can now say that his thinking process has been changed now.
Below is the Twitter revenue from 2012 till now, seen in the loss. You can see how much Twitter made yearly:
As you can see, Twitter Is still losing money.
Is Twitter Profitable in 2023?
Elon Musk, on 2023 15th of July, shared that Twitter is dropping fifty percent in its advertising revenue with a heavy load.
- Musk cut off half of the staff count.
- Started verification version of Twitter; “X”
Is Twitter Profitable Under Elon Musk?
The analyst at CFRA, Angelo Zino, said that Musk got his plans; if he keeps the free and subscription version altogether, it can work. Zino also said that Elon Musk could involve different investors in the future.
Moreover, people now have a very hot topic. Everyone is wondering about the new X blue. However, from the results, Twitter has not been profitable until now; hoping something from Musk can be considered.
Twitter/ X Blue For Subscription
This evolving service is a verification payment. Only trustworthy accounts with a checkmark will pay.
- This feature also provides users to improve their reach.
- See less advertisements.
- Undo tweet.
- And users can personalize their experience on this social media platform.
- However, X Blue has two options for browser users: around 8 dollars monthly or eighty-four dollars per year. And eleven dollars monthly or around one hundred and fifteen dollars yearly for iOS users.
Twitter Ad Revenue Stream
Moreover, users can get a share from the Twitter ad revenue stream by having an ad below their tweet. The verified customers can get profit through the advert in their comments.
According to Matthew Prince, Twitter has been losing users since the start of 2023 in a graph from Cloudflare`s ranking. We hope users will return to Twitter soon to gain an advantage from this feature.
Twitter Users Monetization
Up until now, celebrities have not been paid by Twitter. But to compensate users, Twitter has started this feature.
However, creators must subscribe to the blue domain and generate five million impressions. Moreover, for this purpose, creators will want the people to interact with them in the comments.
You are wondering how Twitter makes money. This article written above in detail must have solved all your queries. It usually makes money through advertising and data licensing. But now Elon Musk is making changes in Twitter through the Blue X domain for genuine creators. Moreover, that will not only give profit to Twitter but also to the creators.
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