14 DAY TRIAL // Social media may be the latest trend for businesses but few are actually making money, and even the service providers themselves are struggling to monetize their enormous user base. YouTube has been losing huge amounts of money for years and other social networks aren't doing great either. Twitter, the rising star of late, isn't making any money yet either but its founders aren't too worried about that, presumably because of the huge chunks of investor money they've been getting. But there is at least one big corporation earning a profit with social media, namely Dell. The computer giant has recently announced it has made over $2 million in sales solely from its Twitter account.
Sure $2 million is small change for a company with a reported revenue of $12.3 billion just in the first quarter of this year but it still is $2 million more than what most other businesses are making. “We’ve surpassed $2 million in revenue in terms of Dell Outlet sales, but we’re also seeing that it’s driving interest in new product as well. We’re seeing people come from @DellOutlet on Twitter into the Dell.com/outlet site, and then ultimately decide to purchase a new system from elsewhere on Dell.com. If we factor those new system purchases that come from @DellOutlet, we’re actually eclipsed $3 million in overall sales,” wrote Stefanie N. on a Dell blog.
The computer maker offers Twitter exclusive deals and discounts through its Twitter account and has gained over 620,000 followers. An important aspect of how Dell is making money with the online networking site may be the fact that it is using the tool properly with a system specifically designed for the micro-blogging service.
But while a success story from one company may inspire others to do the same there is an even bigger number of companies that have failed to understand and properly use social networks. What's more, while the companies using the service may be making money, Twitter itself isn't seeing any of it and while it is thinking about introducing new, paid tools for businesses, for now it is still not making any profit.