If you compare Twitter to other display ad based businesses, it appears the company will not be generating gobs of revenue in the future.
Pascal Emmanuel Gobry at our own Business Insider Research took a look at the amount of revenue that comes from a unique visitor to display ad based business to get an idea about Twitter’s potential.
As you can see, it varies. He thinks logged out Twitter users would generate an amount similar to Demand Media, and logged in users would generate something just shy of what Facebook gets.
Using those numbers, he puts the per user revenue number at $2. With 400 million users, that puts the Twitter opportunity at $800 million annually, right now. As Twitter grows, so should its revenue.
But, somewhat surprisingly, Gobry notes that even if Twitter doubles in size to 800 million users — a huge number — its revenue would still come in at just $2 billion annually.
The bottom line for Twitter: If it wants to be a huge business, it’s going to have to figure out a creative model that does more than just display ads.
Read the full analysis here →
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Article source: SAI http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/gJFSzktlGLw/chart-of-the-day-advertising-revenue-per-user-2011-10