Twitter now profitable thanks to search agreements

Twitter will reportedly earn about $25 million from search deals with Google and Microsoft, enough to push the microblogging phenom into profitability according to sources familiar with the matter. Bloomberg.com reports an October agreement making Twitter messages searchable via Google will generate about $15 million, and a similar deal with Microsoft's Bing search engine will yield about $10 million more. The multiyear deals will together allow Twitter to make a small profit this year--the startups operating costs are estimated to fall between $20 million and $25 million annually. Twitter co-founder Biz Stone declined to comment on the firm's finances.

In November, Twitter said [1] it will focus on generating revenue in the year ahead, and may explore options including an initial public offering. "2010 is really going to be the revenue year. I don't know if we're going to be profitable, but we have plenty of time," Stone said at the time, adding that Twitter has no plans to go on the selling block, it is exploring other options. "We want to build our own company that will last for a long time. If an IPO's the way to do that, then sure. We don't have it checked off on the calendar yet... But if there is some other way, then that would be great, too. Maybe some other new way will emerge."

Earlier this fall Twitter raised about $100 million [2] in new funding, bringing the firm's total valuation to around $1 billion. Stone said Twitter plans to introduce an advertising effort in 2010, declining to divulge specifics but promising an approach unlike traditional web advertising models fueled by display ads and sponsored search. "Everyone's going to love it," Stone promised. "It's going to be amazing."

For more on Twitter's financial status:
- read this Bloomberg.com article [3]