AdAge’s Abbey Klaassen has some thoughts on how Twitter can make money. Let’s take a look at her list, and comment on her suggestions.
1. CHARGE FOR IT
Of course, companies can already use the service for free, so what, exactly, would be new? Ian Schafer, CEO of Deep Focus, has some ideas: more-customizable profile pages, a dashboard to manage followers and tech support.
Comment: It’s the easiest concept to understand but it’s unlikely anyone would pay much to use Twitter. You could maybe get $2 to $5 if Twitter was able to offer QoS guarantees and additional features such as file-sharing.
2. ADVERTISING!
“It wouldn’t be so bad,” wrote Jason Calacanis, if every 10th or 100th tweet was an ad. Graphical ads would really pop on the text-heavy page.
Comment: Judging from what Twitter co-founder Biz Stone said recently, it isn’t going to happen even though most users wouldn’t put up much of a fuss if Twitter did it.
3. CREATE A CONTEXTUAL AD ENGINE
Writes Jason D’Amata: “If I tweeted ‘Twilight,’ not only would Twitter be able to identify me as someone to serve a targeted (movie, book, culture, etc.) ad to … Twitter can take all the language of my tweets and have a working profile for me … à la Gmail.”
Comment: Again, advertising makes a lot of sense but Twitter has little public appetite for it.
4. CHARGE FOR ANALYTICS
Adopt the TiVo data model, said Alexander Gordon. Such a tool could include data about consumer sentiment: What kind of tone do the tweets have? What elements of a product are most often cited?
Comment: There’s no lack of companies using Twitter’s API to offer analytics. The question is whether anyone is willing to pay much, if any, for them.
5. ENABLE MOBILE PAYMENTS
It would make Twitter a $1 billion company overnight. That’s what entrepreneur Nate Westheimer concluded in an essay for Silicon Alley Insider, in which he noted that mobile users of Twitter already use machine language to communicate. “It would position Twitter to revolutionize how money is collected and exchanged on the internet,” he wrote.
Comment: Everyone talks a good game about w-commerce but wireless still has a long, long way to go.
6. CREATE SUBSCRIPTION-BASED GROUPS
Jim TerMarsch suggests Twitter could charge to be part of an affinity group of people who might want to follow a high-profile Twitterer: “Like J.J. Abrams fans — get them to pay to see what he’s thinking.”
Comment: Can’t see it happening.
7. A PRO VERSION
Mr. Calacanis bets 1% to 5% of Twitter users would pay for a version that had perks such as photo, video and music storage.
Comment: This is entirely possible depending on what kind of features Twitter offered.
8. MERCHANDISE
Create Twitter merchandise: T-shirts, messenger bags, scarves. Heck, Microsoft’s doing it — and people don’t even love that company.
Comment: Personally, I wouldn’t buy Twitter swag, and it wouldn’t generate much revenue. A marketing campaign, not a revenue source.
9. SELL IT TO GOOGLE OR MICROSOFT
The ability to send 140-characters-or-fewer messages via a web-based messaging service isn’t what makes Twitter valuable. It’s the social graph. So sell it to someone who needs one!
Comment: Google bought Jaiku to get into the microblogging market. If Microsoft bought Twitter, Twitter would die on the vine.
10. JUST SELL IT TO FACEBOOK
Comment: For the right price – $1-billion?? – it just might happen.
Technorati Tags: facebook, google, twitter
7 Comments
Twitter is supposed to announce a business model in the first quarter of 2009, and much of the speculation is on a Yammer-kind of paid service (free for the general public, paid version with more bells and protections for businesses). That would be ironic given how Twitter started, as a communication tool project for a small company.
Like many, I, too, have speculated on potential models. The one I thought was most Twitter-like was the idea of self-selected advertising. The idea would be to require that everyone follow some small number (maybe even 1) "official" corporate account in order to be able to use the service. It could be any one of the paying businesses or organizations. You could opt out of this requirement by buying a personal membership, but why bother? Since even these corporate accounts would be subjected to the same follow-unfollow dynamics, they would have to use the serivce in a worthwhile way to get value. And since everyone could self-select from however many corporate options there were, the quality of the client relationship would likely improve and advertising messages would be heard.
http://www.blogschmog.net/2008/07/10/monetizing-t…
white labeling the service to allow integration into other web tools and services.
they obviously have the formula, the patform is getting stable and a great ecosystem is growing around twitter. i would integrate something like that into what we are building at favequest and pay for it.
I think the flickr model would work best for Twitter: free with limited usage (up to a certain number of followers/tweets, something nominal like $25 a year for unlimited), provided it makes things easier for folks. Right now it's a lot of hard work trying to find people and figure out how to use Twitter effectively (what the HELL is a hashtag, for instance?), and frankly, if it weren't for the generosity and intelligence of early adopters, social media and tech folks like you, with no tutorial (sorry, but the CommonCraft video just doesn't cut it as a learning/usage tool), it wouldn't have the users it has now.
I totally agree that Twitter needs to make it easier to learn about the 'standard' usage of the service (@replies, hashtags, and so on). FYI, this is the best page I've found about explaining every detail of Twitter hashtags: Hashtags on the Twitter Fan Wiki.
Ruth,
That's certainly one option that seems to have worked for Flickr. One of the things I wonder about is whether people are willing to pay for features that may be available elsewhere. In other words, would they pay for the convenience?
I think they'd readily pay for the 'quantity' features – you don't get anything as a Pro flickr member that you don't get as a non-paying member except increased bandwith.
You coined the term 'tsunami of information' (loved, it BTW, but I'm giving you credit whenever I use it now – I had been saying 'deluge'). There's also a plethora of platforms, and I don't think that can continue indefinitely. For instance, I'm not going to use http://www.goodreads.comas well as the books Living Social app on Facebook – won't be writing the same mini reviews over and over again. I know from talking to entrepreneurs about social media recently that they just can't cope with learning 20 different ways to microblog that aren't integrated with each other – they've heard of Twitter but they're frightened to take the plunge, and rightly so given the amount of research they'd have to do and the fact that they just don't really know where to go for training (nor can they spare the time/money when they're unclear about the business benefit).
And Chris – thank you so much.
One thing they could lift restrictions on for a fee is the use of the API – right now it's common to run out of API juice, so third-party apps are slower as a result.
Another interesting area would be widgets; by partnering with services like Amazon or iTunes users could put their "favorites" on their homepage and Twitter could collect commissions if people browsing happen to see it. If it integrated with Windows Media Player or Pandora so it automatically updated and tweeted new songs you listen to, perhaps it would drive a lot of clicks, who knows?