Twitter Looks To Licence Deals To Answer Growth Critics


Twitter says its ability to make money from licensing data will be one of its key growth drivers going forward

Twitter continues to face questions over the ability of its business model to deliver sustainable growth, but it believes it has an ace up its sleeve thanks to potentially lucrative data licensing deals.

The news comes just over a year’s trading on the public stock market for the microblogging website, after its relatively modest IPO on the New York Stock Exchange back in October 2013.

Soggy Fries

Twitter’s belief in making licensing data deals a potential money spinner was revealed by Adam Bain, Twitter’s President of global revenue, speaking at the Dublin Web Summit in Ireland.

Twitter money IPO commercial tweet dollars © ullrich shutterstockIn the face of concern about slowing growth at Twitter, Bain highlighted the growth potential of three lines of revenue for Twitter – namely advertising, data, and commerce – according to VentureBeat.

Advertising is of course a major growth driver for any company, including Twitter and the likes of Facebook and Google. But Bain reportedly reserved his enthusiasm for the potential revenue streams from making data licensing deals, and revealed that revenue from data licensing had grown 171 percent year-over-year.

Essentially, 500 million tweets are generated every day by Twitter’s 284 million users, and this vast amount of data could potentially offer up valuable insights for some companies, for which they are willing to pay.

Bain pointed to the example of when he was contacted by a company that makes industrial fryers. At first he was puzzled by the contact, as he couldn’t see why the unnamed company wanted to licence Twitter’s data.

But then it emerged that the company made the industrial units that allows restaurants to fry chips (french fries for our American cousins). The fryer maker revealed that when these units malfunction, they tend to produce “soggy fries” and the company therefore wanted to mine the millions of Tweets to discover any mention of “soggy fries”, so it could then contact the restaurant concerned and sell them a new industrial fryer, or offer other services.

Revenue Opportunity

“We think there’s a massive set of insights for businesses in the data,” Bain reportedly said. “What’s unique about this corpus of data is that we think it’s the largest set of public conversations out there. And there’s lots of businesses using this in interesting ways.”

Bain also reportedly spoke about the e-commerce side for Twitter, which is currently trialling a “buy now” button, which potentially heralds a new e-commerce future for the micro-blogging service.

“It’s early days,” Bain reportedly said. “We’re experimenting with different price points and different products. And more importantly, we’re trying to understand what emotions you need to generate to get people to buy right now, in the moment. What we do in the monetization business is monetize emotions.”

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