Filed under: Internet, Web services, Social Software, DLS Interviews
Six ways Twitter can make money
A web 2.0-sized boatload of buzz has surrounded Twitter, the addictive service that allows its users to answer one simple question: what are you doing? The service has made appearances in everything from your friend's blog to the New York Times, and everyone seems jazzed about how fun tweeting is. While we're all having a good time, however, its creators, Obvious, keep hinting at how many practical uses they have up their sleeve for Twitter. Even though they haven't revealed any of their cards just yet, the rest of us are left wondering: how is such a seemingly frivolous service going to make money?As a user who has taken the Twitter pill hook, line and sinker, I've been mulling this question for some time now. I came up with a few strategies, but then I figured: why not run them by the Twitter crew themselves? The least they could say was 'no comment,' but fortunately Evan Williams, one of Obvious and Twitter's founders, responded with a few of his own. Read on for my attempts at making Twitter some money (I'm waiting for my job offer Ev), as well as some choice words and ideas of his own from Evan.
- Twitter Pro - This is one obvious move. Twitter Pro could be a paid service that offers more features, unlimited tweets vs. a 'standard' account that receive a daily/weekly limit. It could also include a mobile phone/Windows Mobile/BlackBerry client with more robust tweeting/following tools that use the web to transmit tweets, avoiding those nasty SMS charges. It could also allow tweeting pics and videos from around the web with a Tumblr-like K.I.S.S. philosophy.
- Merchandise - A while back (though I admittedly can't find a link right now), Evan said merch was a big revenue generator for Blogger, and Twitter has worlds more buzz surrounding it right now. Heck, they even rolled out a small batch of shirts for SXSW, over which users seemed to be pretty excited. As ready as we may be to plunk down some cash for the privilege of using a t-shirt to tell people where we waste most of our time, Ev directly replied to this one: "RE: merchandise - It was, at one time, a noticeable part of Blogger's revenue, but that's when Blogger was just me, scraping by; my guess is it wouldn't make a blip in Twitter's costs today. Unless we figured out how to be a trendy new apparel brand." Sorry everyone, but it sounds like apparel isn't exactly on their list of features to roll out in the next update.
- Twitter for Business a lá Google Apps - Customized, secure software that businesses can run on their own intranet. BlackBerry and WinMo clients are a more apparent option here. Obviously, this could become tremendously useful if Twitter built in some hooks that work like Stikkit and Google Calendar, allowing employees to easily tweet appointments and tasks to a centralized PIM system, and automatically be subscribed to their team's tweets without any extra effort on their part.
- Twitter Forums, ad-supported - Finally, an innovation brought to the aging discussion forum format. Sort of a Twitter approach to Yahoo! Answers, allowing users to post questions and follow threads they're interested in, with the Twitter format forcing everyone to keep things simple and on-topic. Instead of ads, this could also possibly be just for Pro customers. One of the catches here is that Twitter users only see tweets from people they are following. When submitting a question to a Twitter Forum, you would be able to see all replies to the question, even the ones from users you've never met and aren't following.
Two more-straightforward ideas: 1) Ads on the site. We have a little AdSense on there now, but we haven't really tried. As the traffic grows, some tasteful sponsorships might be sellable. 2) Charging companies who are using it for marketing or other commercial purposes. If an organization finds Twitter to be a valuable communication tool with their customers/constituents/etc -- especially if we're sending lots of SMS's for them, which cost us money -- it seems viable to make an offering around that.So there you have it: six ways Twitter can make money, two of which are straight from the lion's mouth. Judging from the sheer magnitude of buzz surrounding the recently-incorporated company, I wouldn't be surprised if these six are but a drop in the bucket. There's good news for those who fear change, however: no matter which way Twitter decides to start paying their exponentially growing bandwidth bills, Evan assured me that: "Our top concern when it comes to monetization will be to do so in a way that does not negatively impact users." Good show guys; your users will appreciate being able to spend their time tweeting about how they're spending their time, with the least amount of distraction.
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Reader Comments (Page 1 of 1)
Marshall Kirkpatrick said 2:53PM on 4-25-2007
I think monetizing mined data is a big possibility. Something like http://twitterment.umbc.edu/ is doing
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jrock said 11:32PM on 4-25-2007
wow. i didnt know twitter can actually make money. nice post.
thanks
http://myagloconetwork.blogspot.com
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Peppery said 1:07AM on 4-26-2007
Some nice ideas. I'd be the first to get Twitter Pro :P. I'd also love a few Twitter shirts while we're at it ;) I'm not too sure about the Business side, however a group messaging thing for teams and the such would be great. I am kinda opposed to the Twitter Forums idea, as I'm growing bored of forums ;0
http://www.twitter.com/peppery
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jangelo said 2:22AM on 4-26-2007
You forgot a seventh way: sell it for a gazillion dollars! I'm pretty sure Evan has experience with this (Blogger). :)
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yongfook said 3:20AM on 4-26-2007
Paid Subscriptions, Merchandise, Enterprise Level App, Advertising. Hmm. These aren't really specific to Twitter, these are all pretty generic ways that most apps try to monetise (or think they can monetise) themselves through.
They each present inherent problems.
1) You can't add a paid subscription level easily as the technology is too simple to clone. If you add a paid level, someone out there will create a site with the functionality of the paid level, but free. It's not like flickr where a user can quantify what they are spending money on (i.e. space to store photos).
2) Personally I don't think Twitter has a strong enough brand yet to exploit merchandising. The site has very little identity apart from the logo.
3) I think attempting to compete with Google and / or the thousands of other companies attempting business apps is a big mistake. There are too many other companies out there - it's far too saturated. That and, you could create a really great product only have Google make it 6 months later and really throw you a curveball. Twitter should concentrate on its core competency, the alpha-geeks and the social networking generation.
4) Is probably one way they can monetise in a small way. Not going to pay people's salaries though, I don't think.
Twitter is a lot of fun (and that's massively important) but it's another app that seems to not really have a business model and is simply aiming for network effect / acquisition as an exit strategy.
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Dan Arbaugh said 10:28AM on 4-26-2007
I agree with some of the previous comments made. The strategies listed in this article are far less likely than Twitter aiming for acquisition and promoting their system as a utility for real-time demographic analysis in the mean time.
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Adrian Chan said 4:22PM on 4-26-2007
good stuff -- additionally twitter could integrate in pix and vid attachments. it could be a way of publishing a message to all of a member's friends/followers (social marketing), e.g. "on behalf of name, you are all invited to blankyblank". of course it could easily use pro level accounts for dating. and add to that things like missed connections, classifieds, ride shares, and so on. tweets could be tagged and in that way be much more useful when searched. and other meta data could be captured to help structure talk. a language might come of it -- short form messaging would then be capable of packing in a ton more information and specified terms/phrases might become event triggers: to send a message, to friends of a friend and so on.... what if tweets could be tied to media players. a message might then become a command to play a song, or call up a vid..
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matthew knight said 3:48AM on 4-27-2007
There's a discussion of this over on 901am.com - and i'm posting a comment i left on their article here, as its also relevant:
There is always the reverse SMS billing option, or taking a small percentage of the cost of the SMS being sent. I know many shortcode operators in the UK have something setup where they get a revenue cut of the cost of sending an SMS, so when twitters send a tweet via mobile, they take a small slice of that. It wouldn’t increase the cost to the user, or perhaps by a tiny amount, but bring in steady revenue, as it is of course a mobile service, despite all the online and IM support it now has.
Although, in addition, perhaps Ev and his team (or rather Jack and his team, now they're a fully spun off company) don't wanna monetize Twitter just yet. Its still in its infancy, and perhaps it should spend its early years just being a very cool service building its user base. Somethings are created simply because "it would be cool to do". In any case, i don't doubt they're thinking already about the topics you've posted above.
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Mike D said 1:28AM on 4-28-2007
A couple more ways to monetize:
1) Charge businesses who are using Twitter for marketing purposes (e.g. Justin.tv, Woot, etc.)
http://www.mdoeff.com/blog/2007/03/21/the-future-of-twitter/
2) Classified ads
http://www.mdoeff.com/blog/2007/03/23/future-of-twitter-part-3-can-twitter-challenge-ebay-and-craigslist/
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thw said 9:12AM on 5-10-2007
I found a site named " twitcash"
for Twitter Users:Get paid per follower, per post. It's free to join and private.
for Advertisers :Get your brand or link out fast, to the people that matter, in a way they use
check at http://www.thws.cn/article.asp?id=1346
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john said 1:42PM on 6-03-2007
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