Twitter may be doing very well in terms of hype and popularity but not so well when it comes to actual revenue. Of course, the microblogging service can afford to postpone revenue generation, while it focuses on creating a better product, as Twitter, despite its success and popularity, is still lacking in some key areas. Still, it will have to get around to making money at some point and Twitter has been claiming that it should start seeing revenue this year. Now All Things D reports that Twitter is in talks with both Google and Microsoft to create some sort of data-mining licensing deal, though none of the parties involved have commented on the issue.
Twitter is sitting on a treasure trove of data which it has gathered and continues to pour in from the millions of tweets it sees everyday, anything from popular stories and new trends to demographical stats and media content going viral. With billions of tweets every month from the service's 50 million or so users, it represents a significant portion of the online population and the data, if properly decoded and analyzed, could prove of tremendous value for interested companies.
Now it looks like some of the major players in search are looking to tap into that data and maybe integrate some Twitter features into their search engines. Google and Microsoft are apparently both interested and several possibilities are currently on the table both regarding the type of deal but also the financial side. Twitter may be getting a payment up front and several revenue-sharing options are being discussed. However, any deal that may be reached will be non-exclusive as Twitter wants to keep its options free and also stay away from the search war gearing up between the two tech giants.
A deal of this sort does make sense for Twitter in several ways and would be beneficial for the company. The most obvious advantage would be the revenue Twitter would start getting which, despite the microblogging site sitting on more than $125 million in cash in investor money, would be a nice change for it. But a licensing deal would also sit well with Twitter's philosophy as it tries to position itself as more of service provider, a utility company and nothing more. As such, the company is very opened to third-party developers and services and has on many occasions favored third-party tools to the ones developed in-house.