#SoggyFries an Important Data Revenue Indicator for Twitter (NYSE:TWTR)

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By Erik Waters on November 5, 2014 Social Media

Even though social media networks, including Twitter (NYSE:TWTR), generate most of their revenue through advertising, Twitter (NYSE:TWTR) is now exploring a new area of business: selling data to businesses.

According to Twitter (NYSE:TWTR)’s Global Revenue President, Adam Bain, each and every tweet that users post on the social networking website Twitter (NYSE:TWTR) contributes to the growth of its business of selling data to businesses (Twitter (NYSE:TWTR) can legally do this, considering how all tweets are public posts, without any privacy concerns whatsoever).

Citing a recently signed deal with a manufacturer of deep-fryers as one of the examples, Bain highlighted how businesses, small and/or medium sized, are more than willing to pay for the massive amount of data available with Twitter (NYSE:TWTR).

Whether the deep-fryer company would be able to generate any worth out of the data provided by Twitter (NYSE:TWTR) is a long shot, a belief long-held by Bain. However, after the manufacturer of deep-fryer asked for data associated with the hashtag #SoggyFries, Bain changed his viewpoint about the potential Twitter (NYSE:TWTR) data holds in the business world. The data associated with #SoggyFries would be used by the deep-fryer manufacturer to identify the companies in need of new frying equipment.

After receiving the demand for data on the #SoggyFries, Bain analyzed the hashtag, and sure enough, thousands of people all over the world were using the hashtag every week. Twitter (NYSE:TWTR) revenue from selling data to businesses has risen by almost 171% in the last year.

Twitter (NYSE:TWTR)s main revenue generating source is advertising, with the social networking company generating over $361.3 million ad revenue in the third quarter of this year, up by 114% from last year. 85% of the ad revenue generated by Twitter (NYSE:TWTR) comes from mobile advertising.

According to Bain, Twitter (NYSE:TWTR) is the fastest growing business in the world, as far as businesses relying on ad revenues are concerned. In a recent interview, Bain remarked, “There’s no other billion-dollar ad business that’s growing at close to 100%. And we feel like we’re just getting started.”

With Twitter (NYSE:TWTR)’s increasing interest in increasing its revenue, users became worried about the future, fearing a surge of advertisements will disrupt the experience on the social networking website. However, Bain has reassured the masses using Twitter (NYSE:TWTR) that the company will do its best to avoid intrusive advertisements. According to Bain, “[users]can do all the things to a promoted tweet that [they]can do to an organic tweet.”

Ever since Twitter (NYSE:TWTR) became a public company, it was being feared that the company will be pushed to increase revenue by allowing “loud” adverts on its website which would disrupt user experience, like what happened with Facebook (NASDAQ:FB) after it went public. However, denying any pressure from investors, Bain said ads are encouraged to “be good, instead of just loud.”

Twitter (NYSE:TWTR) wishes to expand its data-selling business further, to companies much grander than deep-fryer manufacturers. Recently, IBM (NYSE:IBM) signed a deal with Twitter (NYSE:TWTR) to analyze and process over 500 million tweets every day, and to offer the results in a consultancy service.