Twitter will earn $150 million in 2011

Twitter will earn $150 million in 2011, more than three times the $45 million it earned in 2010, according to the firm’s estimates. In 2012, Twitter’s revenue could reach $250 million, eMarketer said.

The fast-growing revenue projections suggest that Twitter has the potential to be a real moneymaker, not just a nifty communications service. Ever since Twitter was founded nearly five years ago, critics have questioned the company’s ability to generate significant revenues, especially because has been wary of plastering ads on the site lest it alienate its hardcore users.

“If Twitter can grow its user base and convince marketers of its value as a go-to secondary player to Facebook, it will succeed in gaining revenue,” said Debra Aho Williamson, eMarketer principal analyst. “In 2011 it must work overtime to give its early advertisers a positive experience.”

Williamson predicts that Twitter’s revenue growth will be driven by its Promoted Tweets and Promoted Trends products, which allow advertisers to pay for prominent placement on the service. She also said that Twitter would launch a self-service ad system like the one Facebook has deployed with much success.

In a sign of the diverging fortunes of Twitter and MySpace, the micro-blogging service will pass the troubled social networking pioneer in revenues by 2012, eMarketer predicts.

Last month, Twitter received a $200 million infusion led by Kleiner Perkins Caufield & Byers, one of the premier venture capital firms in the world, that valued the company at $3.7 billion.

WIRED