For a while, it seemed as if Twitter would never figure out how to properly monetize itself. Advertising, obviously, seemed the key, as it worked quite well for Facebook. And now, ad dollars have put Twitter on track to not only turn a hefty profit, but also potentially surpass Facebook in the near future.
To understand how this happened, consider television. Networks charge advertisers for airtime, usually per 30-second spot. The rate at which online properties charge advertisers is called CPM (“cost per mille”), or cost per one thousand pageviews. Facebook’s CPM last quarter was less than $0.50. Twitter’s CPM, on the other hand, was about $3.50. The vast difference comes down to the fact that Facebook relies on display advertising, such as banner ads on side panels, whereas Twitter integrates ads into users’ streams.
[via Business Insider]