January 24, 2011 / 7:22 PM / in 7 years

Research firm sees Twitter's ad revenue tripling

SAN FRANCISCO (Reuters) - Twitter is set to triple its advertising revenue this year and could generate $250 million in ad revenue in 2012, according to an industry research firm’s projection.

The revenue estimates provide one of the first public assessments of the fast-growing Web service’s money-making performance and come a month after Twitter was valued at $3.7 billion.

Twitter, which had 175 million users as of September, is among the new crop of popular Internet social networking services including Facebook, Zynga and LinkedIn.

A growing secondary market has developed for shares of the privately held Web sensations, and investors are watching the companies closely in hopes that they might eventually float shares to the public.

LinkedIn has selected financial underwriters for a planned initial public offering this year, sources told Reuters earlier this month.

Twitter, which allows users to broadcast short, 140-character messages to groups of “followers,” was created in 2006 but did not offer a way for marketers to advertise on the service until mid-2010.

According to the report released on Monday by industry research firm eMarketer, San Francisco-based Twitter generated an estimated $45 million from ads in 2010 and is expected to bring in $150 million in ad revenue in 2011.

The growth in Twitter’s revenue this year will come from the forthcoming launch of a self-service advertising feature, eMarketer said. The report noted that such a self-service advertising capability, in which marketers can quickly create ads online, has been a major factor behind growth at Google Inc and Facebook.

Google, the world’s No. 1 Internet search company, generated roughly $29 billion in revenue in 2010. Facebook, which was recently valued at $50 billion, generated roughly $1.9 billion in ad revenue in 2010 and will bring in about $4 billion in 2011, according to eMarketer.

Twitter is privately held and does not disclose financial information. Twitter spokesman Matt Graves declined to comment on the eMarketer report. He said that Twitter has previously announced plans to introduce a self-serve ad platform in 2011.

In December Twitter received $200 million in venture funding in a deal that valued the company at $3.7 billion.

Reporting by Alexei Oreskovic, editing by Matthew Lewis

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