No – Making Money From Social Media Not As Easy As It Sounds.
You know how you can retweet something on Twitter? So you get some rubbish that somebody you ‘follow’ likes and thinks you want to see? Well occasionally a nugget is retweeted.
One such is from Re/code, a technology blog, retweeted and reported by Harriet Denny in the Daily Telegraph and covered elsewhere.
It seems that Twitter have a plan to stem their dramatic losses. They are going to sell directly from the site in a new project called Twitter Commerce, to tap the market of 232 million users.
Fancy That? Buy It
Losses are massive. In 2013 they were $141m. The last quarter of 2013 alone saw losses almost at $15m. Revenues are rising too, though, from £317m in 2012 to $640m last year, a third of which came Oct-Dec. So they are losing more and earning more.
So they are partnering with American Express and US ecommerce site, Fancy to enable Twitters to buy from a tweet with a product pictured and a button that invited ‘buy with Fancy’.
This is not new, of course, Facebook launched ‘Gifts’ in 2012, a spin-off that encouraged users to buy goods from the site. It was abandoned after less than a year through lack of demand. I mean, how much more retail opportunities do people want?
Twitter’s share price is regarded as over-valued when it floated in New York last November for $14.2bn, since then it has been valued as a company at around $36bn. Some economic analysts think they have timed a business model right in terms of advertising partnerships with TV broadcasters and others.
How Do They Make Money?
Twitter Investors will put up with loss for a period of time, according to what Ken Sena, analyst at Evercore, thinks – ‘as long as Twitter can demonstrate traction in terms of revenue and users.’
Denny reported that 10-year old Facebook only started making serious money in the past two years ‘after working out how to make money from its mobile users.’ Profits are now at $1.5bn, up from $53m on 2012 – that’s 38% growth.
What other investments get that kind of return?
The popular view is that Amazon, big as it is and not a social media site (yet) doesn’t turn a profit. Not according to Jason Kay in an article online, How Amazon Works – How Do They Make Money? – ‘Amazon now makes money hand over fist.’
If you like the idea of making more yourself in return for the time you may spend on social media, check out a blog, admittedly from 2010 about Don Crowther’s ‘Social Profit Formula’ on Entrepreneurs-Journey.
Some of the Blogs we’ve published about Twitter and Co:
If Twitter Ruled the World, What Would Its Policies Be? 19 August 2013
Questions About Social Media’s Recent Character Invite Comment and Abuse, 11 September 2013
Time to Cage the Twittering, Tweeting Bird of Internet Freedom, 22 January 2013
Some Big ‘What Ifs …?’ for the Digital Future, 10 December 2013
Holding Back the Facebook Tide, At Least in the Mind, 25 November 2013
Who Actually Owns Your Social Media? 19 June 2012
What If Facebook Was a Country and Other Ideas, 3 April 2012