Despite being one of the world’s largest social networks, and boasting a user base in the hundreds of millions, Twitter have struggled to actually turn a profit. This year, for the first time ever, the company came out in the black, but only with a mere $9 million of profits, a miniscule amount for a company as big, and as heavily invested in as Twitter. In order to improve this situation the company needs to find new revenue streams, beyond its current advertising-based model.
The solution that it seems that they have decided upon is the inclusion of e-commerce elements into the social network. The company in a blog post today announced that they would begin to include a “buy now” button into selected tweets, which would allow a user to make purchases directly from the social network. They explain:
This is an early step in our building functionality into Twitter to make shopping from mobile devices convenient and easy, hopefully even fun. Users will get access to offers and merchandise they can’t get anywhere else and can act on them right in the Twitter apps for Android and iOS; sellers will gain a new way to turn the direct relationship they build with their followers into sales.
While Twitter has been rather stop-and-start when it comes to integrating new features, since their IPO, they now have greater impetus to deliver a profitable return to shareholders. E-Commerce integration would provide a new way in which Twitter could boost its revenues and represents a natural evolution of its advertising based revenue model.
Through the inclusion of ‘Buy Now’ buttons within tweets, Twitter could general additional revenue in several ways. Firstly it could charge merchants for the creation and maintenance of specially merchant accounts which would include the ‘Buy Now’ option in their tweets. Secondly Twitter could change merchants for the promotion of these tweets, treating them as a form of high-converting ads. Lastly, and perhaps least probably, they could also take a small percentage cut of each product sold through their service.
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