How Twitter was born

I was asked to create a Twitter account for my online journalism class. It came to me then. I have been an active Facebook user for many years now and I know its story (Hello, The social network film!) but, what about Twitter?

Twitter was created In San Francisco in 2006 by Evan Williams, now chief executive and who is ranked as number 9 in the MediaGuardian top 100 most powerful people; Jack Dorsey, chairman; and Biz Stone, creative director. It rapidly became its own company, ‘Twitter Incorporation’, in March 2006. Since then, Twitter hasn’t made any money. Instead, investors have been giving money in exchange for partial ownership and the rights to a cut of future profits (if there are any). These investors called “venture capitals” or VCs are companies in which wealthy individuals or organizations can bring their money together to help fund companies with a promising future and keep them alive. But the “SMS of the internet”, as Twitter is also called, has still not found its business strategy. It has refused to adopt an advertising business model in which ads are set all over the blog, as it the case in other social networks. That way, Twitter has no official business model for the moment.

However, the site was planning to start generating revenue in 2009 from the fast-growing free service: “We'll start experimenting this year. We don't have to hit a home run right away, we remain focused on growth, but we're looking forward to showing some progress in this area”, co-founder Biz Stone said in 2009 for a AFP interview. Evan Williams added on October 21, 2009, that one idea is to sell businesses that use it packages with extra features to help them reach their customers and follow people’s opinion about them on the site (In fact, there is an interesting blog about how business and law firms can profit from Twitter for marketing purposes) Therefore, Twitter founders expect to roll out paid commercial accounts the very next future. Despite all the ideas, Twitter is still developing its model and does not charge users.

The California-based company claims to have more than six million users and a “phenomenal growth rate” of a monthly 900 percent. It is ranked as one of the 50 most popular websites worldwide and is supposed to be the fastest-growing site in the Member Communities category. Concerning the economic data, there is some information about Twitter. A hacker succeeded to access some private Twitter documents (Instead of circumventing any actual security measures, the hacker managed to correctly answer the personal questions that some Internet sites ask when users need to reset their passwords), including financial information they expected once they start making any money. This numbers were re-taken and published in The New York Times on July 15, 2009:

Twitter expected their first revenue to come in Q3 2009. A modest $400,000 was expected, followed by a more robust $4 million in Q4. The document also shows Twitter’s projected user growth (25 million by the end of 2009), which it has absolutely blown through already. By the end of 2010, Twitter expected to be at a $140 million revenue run rate.

Further numbers talk about an increase till the end of 2013: 1 billion users, $1.54 billion in revenue, 5,200 employees and $1.1 billion in net earnings. Twitter made sure these numbers were not official, and, since they haven’t implemented any changes to start making revenue, they have not been fulfilled neither for now.