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Yahoo Pact Gives Twitter Distribution, Revenue

Like Google and Microsoft, Yahoo Will Get 'Fire Hose' of Data

By Published on . 7

SAN DIEGO, Calif. (AdAge.com) -- Do you, uh, Twitter?

That's what Yahoo is going to be asking in the coming months as it integrates the micro-blog service into nearly all of its products and pages, including Yahoo Mail, Sports, News, Finance and Search.

It's the latest step in Yahoo's latest strategy, which is to integrate the world's most popular social networks into the Yahoo environment rather than try to compete with them. The pact is similar to a deal with Facebook announced in December, allowing users to import their connections and update their status through Yahoo.

The deal will give Twitter a vast new distribution to 600 million Yahoo users, and something else it has found scarce: revenue.

Distribution and revenue
Like the search deals with Microsoft's Bing and Google struck earlier this year, Yahoo will be paying Twitter for its data. Yahoo will start indexing Twitter updates in search immediately, and will integrate the Twitter service throughout its properties over the next several months.

Twitter is in the enviable position of having most major media entities on the web, as well as TV, stumbling over themselves to promote the service for free as they implore viewers to "follow" them on Twitter. Twitter is also famously open with its technology, allowing others to build applications to access the service on PCs and phones, which in turn has helped power its growth. But those relationships don't provide Twitter any revenue, nor do any of the ad platforms that have been built on Twitter.

Twitter is, however, charging a fee in these deals for what one exec described as the "fire hose" of data, which includes 50 million bursts of text or "tweets" per day.

Ad platform coming
Twitter is also said to be working on its own ad platform. Head of Twitter monetization, Anamitra Banerji, told the Interactive Advertising Bureau conference on Monday he is concerned that some of the external Twitter ad platforms may be doing damage to the Twitter experience.

Jim Stoneham, Yahoo VP-communities, said the integration with Twitter, like the deal with Facebook, would operate on the "plumbing level" and is designed to make sharing Yahoo content from news stories to fantasy football trades seamless. Users will be able to log into Twitter using their Yahoo ID and view all their social communications in one interface.

"We've spent a couple years building up social on Yahoo so anything you do on Yahoo can be shared out," Mr. Stoneham said. "It's aggregating a network of networks to increase reach for Yahoo properties."

Mr. Stoneham said there is 88.4% overlap between visitors to Twitter.com and Yahoo properties. Visits to Twitter.com is an inexact proxy for Twitter users, because many use the service through third-party applications, but the overlap statistic is still a sign that most Twitter users also frequent Yahoo sites.

"The information in one single tweet can travel light-years farther with this Yahoo integration," Twitter co-founder, Biz Stone, said in a statement. "Tweets in more places brings relevance where and when you need it most."

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