What do you do when you're wildly popular, face increased costs due to that popularity, and have no discernible way to make money? Call Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG), and let them fight over the right to solve your problems for you. Twitter, the off-the-charts hot microblogging site, is said to be in advanced talks with both titans of the technology industry about giving them access to its data feed, according to an All Things D report (via Reuters).
The hope would be for either company to use the Twitter feed data to improve its search engines, with a goal of "real-time search" -- which translates to sifting through the torrent of tweets posted every second. The deal structures on the table vary, from a multimillion dollar licensing deal to revenue-sharing programs that would give Twitter a taste of the ad cash generated by Microsoft or Google from its use of the Twitter data.
Google and Microsoft, aren't saying a thing, according to Reuters, and the guys over at Twitter, apparently, weren't immediately available. They were probably dreaming up new ways to spend all the cash they figure they'll be rolling in.
If one of these deals comes through, it would probably be even better than the corporate account revenue stream that Twitter's trying to develop. Reselling data -- that's generally available to the public anyway -- keeps the service free and provides a small company with a small base of paying customers, which makes the sales and account management process a whole lot easier and less expensive. This means lower overhead and hopefully more cash to be invested in the environment, new functionality and other benefits to the people who aren't paying for the service.
Also, it could free up some cash to invest in marketing, which brings new users, more tweets, and more and better data to the companies paying the bills. Twitter would still be nuts not to develop the corporate account revenue model, but selling the data seems like an absolute no-brainer. And, it might lead to a payout for all those investors.