Twitter Ad Revenue May Reach $150 Million This Year

Twitter will probably more than triple its advertising revenue to $150 million this year as more companies use it to spread marketing messages, according to the Internet researcher EMarketer.

Twitter, which has more than 175 million registered users globally, is competing for advertising dollars with larger companies such as Google Inc. and social-networking rival Facebook Inc. Photo: Chinen Keiya/Flickr

Twitter Inc. will triple its advertising revenue to $150 million this year, and it might reach $250 million in ad revenue next year, according to the Internet researcher EMarketer Inc.

Twitter has so far managed to attract big advertisers such as American Express, Coca-Cola, Toyota, HP and Starbucks, and companies such as Dell have proved they can promote their products well using Twitter even before it launched its promoted tweets program, said Debra Aho Williamson, an analyst at EMarketer, which today released its first multiyear research report on the micro blogging website.

“If Twitter can grow its user base and convince marketers of its value as a go-to secondary player to Facebook, it will succeed in gaining revenue. In 2011 it must work overtime to give its early advertisers a positive experience,” Debra Aho Williamson.

eMarketer came to the $150 million figure by comparing Twitter with Facebook, which had ad sales of about $150 million in 2007, right after it got serious about selling ads. Although Twitter is still a lot smaller than Facebook, whose 2010 ad revenue was estimated at $1.86 billion, with 145+ million users and constant growth Twitter might soon start breathing down Facebook’s neck.

Furthermore, eMarketer predicts that the majority of Twitter’s advertising dollars in 2011 will come from the U.S., but in 2012 at least $25 million or 10% of ad revenue should come from international advertisers. Also, eMarketer sees Facebook’s ad revenue growing to an astonishing $5.7 billion in 2012, while MySpace should drop from its current $288 million to $156 million in that same time period, which would make Twitter bigger than MySpace not only in terms of traffic but also in terms of ad revenue.

Are eMarketer’s predictions for Twitter too bold, too timid or right on the money? Does Twitter’s advertising model have what it takes to keep the advertisers interested long-term? Share your opinions in the comments. [eMarketer via Mashable and Business Week]

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