Twitter’s $25 million in Search Deals
Like most social networks trying to attract a large following before turning a profit, Twitter’s free services was a strategy to attract a large number of users. But unlike MySpace, Facebook, and YouTube, all of which continue to explore new paths to profitability outside and usually within the realm of online ad revenue, Twitter’s made 2 search deals, one with Google and another with Microsoft Bing that has turned a profit for the company totaling, according to estimates from Bloomberg BusinessWeek, $25 million.
Since Twitter isn’t public, the numbers can’t be confirmed exactly, but inside sources say that Twitter got $15 million for the Google deal and another $10 million from Microsoft. What this means for those of us enjoying the ad-free Tweet-scene, stay tuned for meta-data added to your tweets and indexing of what we’re all talking about so that they can eventually sell ads in 2010.
This brings up another sore point that happened last week from Facebook who changed their security and privacy settings (with a hidden opt-out option that wasn’t very easy to find) allowing them to index personal information. Uproar among users has been loud because Facebook was considered a safe haven for personal sharing of information, conversation, and so on with families and friends. For Facebook users who have not opted out yet, basically Facebook will be able to index that content and sell ads related to the context of specific topics and personal information.
Paying for added features is something many social networks, especially those associated with video gaming, have been doing to drive revenue for years among youth culture in China, as we’ve continuously reported and detailed in our China Youth Culture Study 2008-09. It seems that now, LinkedIn, Skype, ESPN, and Zynga, among others, are catching onto this bandwagon and are planning on increasing sales revenue by offering add-ons relevant to their users.
For example, last month LinkedIn added a recruiting feature this helps agencies find qualified candidates on the network, which range from $24.95 to $499.95 per month. Skype added a paid-for voicemail service and calling plan, and ESPN started a paid-for ESPN Insider service fee of $6.95 for certain content. Called “freemium” it’s one way for the freebie social networks to get a slice of revenue based on an iTunes-like model of micro-payments for key features. This also lessens the dependency on revenue from the antiquated model of online advertising revenue.
Similar to many network gaming sites attractive among China’s youth culture, Zynga’s games which people play on Facebook in the USA, charge for additional virtual gaming tools like weapons to use in “Mafia Wars” or farming equipment for “Farmville.” As youth culture continues to float the line between virtual lifestyle and real, you can expect that such virtual spending in real dollars in the form of micro-payments will be a huge revenue source in the future -just as iPhone apps have already tapped into.
Google QR Phones
QR codes readable on smart phones have been the wave of the future in youth culture in Japan for some time and are just now becoming the hot new commodity for cell phone users in the U.S. One of the latest interactive usages of QR codes, marketing, advertising, and consumers was when earlier this month, Google sent out 100,000 stickers to stores that ranked as “Favorite Places” based on top searches from Google Maps. If the store posted the QR code from Google, those with smart phones could scan the code and up pops important listing information from Google such as prices, website links, store details, and sales.
The deal goes even further with Google offering up coupons with some businesses via QR codes. Again if you have a smart phone (or you’ve downloaded the QR reader), you can scan the QR code and get a discounted coupon to a particular item or store.
QR code usage has been around for years in Japan and China, as we’ve noted, and are also popular for interactive advertising and communication in parts of Europe. Even Parisian-based street artist Space Invader has seen the power of “second messaging” via QR codes embedded into his Pacman-like tile art. As we noted in “MCommerce, the Future of Retail” report, QR codes are clearly the direction of interactive consumer retailing, which we go into detail about in the report.
For Google, they plan on rolling out more QR-advertising like scenarios for use, obviously, when people aren’t at their computers, which for a new generation of young people who live virtual lifestyles, is becoming a part of their everyday culture.
The even bigger news however is the Google QR-code compatible Google phone. Reviews are out for the T-Mobile G1 Google phone which features many Google applications, but Google is rumored to be doing their own thing in 2010 and skipping right over cell phone carriers and going straight to consumers.
Google’s “official” phone would run on their own proprietary language, Android, which Motorola, Sony, Samsung, and Ericsson are all making handsets for as well.
Right now the only way to know how the Google Phone is working is to work for Google and be among the select group of employee testers who have one. But we can expect to know very soon how it all works and if it’s QR compatible. Like the popularity of the application on phones among youth culture in Japan, this may just be the phone of the future for the USA as well.