Twitter Will End The Year Profitable

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Twitter’s search deals will help it achieve a small profit for 2009, Spencer Ante at Bloomberg-BusinessWeek reports.

Two sources familiar with company’s finances say it received $25 million for its search deals with Google (GOOG) and Microsoft (MSFT). Google paid $15 million, and Microsoft paid $10 million.

That’s enough for Twitter to earn a small profit this year.

Ante also reports Twitter is cutting costs by negotiating better deals with telecoms. It used to pay a hefty sum to send Tweets as texts. It doesn’t anymore.

While the small profit is welcome news for Twitter, it appears to be almost incidental. It’s certainly not the reason investors valued the company at $1 billion earlier this year. Twitter could hire a few more employees and wipe out the profit. Indeed, it says its looking at hiring talent through acquisition.

Next year, Twitter will focus on building a long-term, sustainable, business plan. Part of that will include advertising.

Twitter also needs to make sure its user base continues to grow. Its explosive growth slowed down as the year went along.

See Also: Twitter’s Path to $1 Billion

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