Twitter has done an deal with ad agency holding company Omnicom that will bring it $US230 million in revenue over the next two years according to the Wall Street Journal.
The deal is an indicator that advertisers are really starting to take Twitter seriously as a big media vendor. It is reminiscent of a previous deal Twitter struck last April with Publicis, another ad agency group. That one was worth $US200 million.
Whether it will move the stock or not is a separate question. Investors have been focused on Twitter’s slow user growth. They appear to be unmoved by its robust revenue growth.
This new deal strengthens the argument that Twitter’s business model is actually different than that of Facebook or Google — Twitter may not be the mass medium for ordinary people that those other companies provide. Rather, it may be valuable as a specialist medium for people who need a lot of current news.
Disclosure: The author owns Twitter stock.
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