

Human: How is Twitter a billion dollar company? They don't even sell anything, do they? And their service is free.

Assistant: That's a great question. Prominent venture capitalists previously invested hundreds of millions in Twitter, including $500 million by Kleiner Perkins and $400 million by AOL. Together with the $225 million from Sequoia Capital in 2010, Twitter has raised more than $1.5 billion in venture rounds of financing. However, the popular perception is correct: Twitter itself does not charge a fee for use of its service.


Human: How is Twitter a billion dollar company? They don't even sell anything, do they? And their service is free.

Assistant: Twitter is a social networking service where users post short messages called ‘tweets’. While there is no direct cost to tweet (i.e., an individual can post tweets freely), Twitter recruits business accounts that use Twitter to promote their services or products.  Some of these business accounts are large and generate large profits for Twitter. For example, Coca-Cola, Adidas, Home Depot and Disney use Twitter for promotional purposes. Twitter also charges companies to advertise, so many of Twitter’s revenues come from advertising.  Finally, Twitter accepts donations that benefit selected charitable and natural disaster relief organizations. As for Twitter not selling directly to individuals, it has become an advertising platform for a wide variety of consumer markets.
How is Twitter a billion dollar company? They don't even sell anything, do they? And their service is free.
That's a great question. Prominent venture capitalists previously invested hundreds of millions in Twitter, including $500 million by Kleiner Perkins and $400 million by AOL. Together with the $225 million from Sequoia Capital in 2010, Twitter has raised more than $1.5 billion in venture rounds of financing. However, the popular perception is correct: Twitter itself does not charge a fee for use of its service.
Twitter is a social networking service where users post short messages called ‘tweets’. While there is no direct cost to tweet (i.e., an individual can post tweets freely), Twitter recruits business accounts that use Twitter to promote their services or products.  Some of these business accounts are large and generate large profits for Twitter. For example, Coca-Cola, Adidas, Home Depot and Disney use Twitter for promotional purposes. Twitter also charges companies to advertise, so many of Twitter’s revenues come from advertising.  Finally, Twitter accepts donations that benefit selected charitable and natural disaster relief organizations. As for Twitter not selling directly to individuals, it has become an advertising platform for a wide variety of consumer markets.