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Twitter Inc. (NYSE:TWTR) Will Monetize 2016 Election Fund-Raising

Twitter Inc, (TWTR) Earnings No Joke

Twitter Inc. is serious about making money from politicians as the 2016 elections draw near. In late August, it was reported that Twitter was working on new ways to make money from presidential hopefuls. It appears that the firm has worked out a way to make money from the election campaigns as the Wall Street Journal reports that Twitter is offering campaigns a new way to raise cash.

Twitter Inc. (TWTR) Monetizing US Presidential Fund Raising

The new service will make it easier for Twitter users to support campaigns with secure donations in line with FEC guidelines. Twitter is launching this new service in partnership with Square Inc. Square is a payment processor at which Jack Dorsey; Twitter’s current CEO is both Co-founder and CEO. The news of Twitter’s campaign service highlights the firm’s resolve to finding a way to monetize its service to delight investors since user-growth has apparently hit a glass ceiling.

There’s money in the elections

During the 2012 elections, it was estimated that campaigns spent more than $2B on creating buzz for their candidates. For the 2016 election, the estimate is that digital ad spending will be more than $1B; hence, Twitter is already standing where the money is located. Twitter’s head of political sales, Jenna Golden while speaking with Forbes in August said, “We are clearly in a different place right now than we were in 2012″.

Golden also gave hints about Twitter’s upcoming service and the importance of that donation service to campaigns. She was quoted saying, “we are in a place where we can work with these candidates and help them realize they need to shift their budgets to be on this platform.”

Twitter’s announcement of the new service is timed ahead of the republican presidential debate holding tomorrow. To the firm’s credit, some presidential hopefuls are already saying that they will use the service a means to source more funding from their supporters. WSJ reports that both Ben Cason and Rand Paul have said they’ll use the service. Doug Watt, communications director for Ben Carson was quoted saying, “We’ve been anticipating the program and we expect to make robust use of it.”

Twitter might win big with this

Twitter’s deal with Square might help the firm score a homerun in making money during the elections. For one, Twitter will encourage the campaign to buy ads with the “Cashtag” link with which users can donate – the firm makes money from the ads. Twitter also builds engagement for its users as the conversation about elections go live. Square charges a 1.9% fee for each donation and Twitter will surely late a cut of that cut.

In the words of Vincent Harris, chief digital strategist for Rand Paul, “Twitter is the center of the political universe during debates, and their partnership with Square will make the platform even more attractive to campaigns looking to spend time and resources there”.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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