Help Twitter Find a Revenue Model

http://www.readwriteweb.com/archives/help_twitter_find_a_revenue_model.php

by qhoxie • 18 years ago

19 38 18 years ago

If Twitter fails to find a revenue model and hits the deadpool, it will have a chilling effect on innovation. That matters to all of us in the innovation economy. Sure, you could live without Twitter, but what about the funding chances for that brilliant idea of yours?

Hmm... the idea isn't so brilliant if I can't find a revenue model either.

qhoxie2• 18 years ago

I don't actually agree with their lead in quote. Twitter has taken a stupidly simple idea and become the center of attention in the circles of tech entrepreneurs and many of others. Things like Yammer come and piggy-back off of it and it grows into it's own sort of ecosystem.

The only effect of Twitter going into the deadpool would be shock about how they could have possibly blown their momentum.

bootload• 18 years ago

"... Things like Yammer come and piggy-back off of it and it grows into it's own sort of ecosystem ..."

There is one source of revenue - licensing usage to other companies. I'm not quite sure why they haven't struck deals with companies like Yammer?

qhoxie2• 18 years ago

It is too simple to recreate, that's why. Especially on a small scale like a per-company basis.

MicahWedemeyer4• 18 years ago

Is perpetual VC funding not a viable business model?

ram10243• 18 years ago

hehehe that's cute

here's a novel one i thought up. Social Donation System. how it works is, users can log in and make donations, and the level of contribution is reflected by their profile. this is gauged against the average level of contribution of other users making a curve.

so people who don't donate might have a red light by their tweets or something. people that donate a little get a yellow, people who donate an average amount get a green light. people who go above and beyond get a blue star or something special to show that they have made an exceptional effort to support the community.

have it calculate daily or something non-intensive, but make sure as with all donation systems that everything is 100% transparent to users. it could work

MicahWedemeyer4• 18 years ago

Nothing against donation-ware, but I don't think it works as a big money-maker. IPOs and acquisitions come from companies that are making revenue based on some sort of sale (even if it's sale of ad space).

There has to be some aspect of "keep paying me or I remove the benefit you're getting"

Donation-ware is great for single developers, not so great for startups looking to make sustainable revenue.

steveplace2• 18 years ago

No idea for the revenue, but I use stocktwits.com. They just got funding.

MicahWedemeyer4• 18 years ago

Isn't stocktwits about the worst way to do investing research? Make your decisions based on the fast-twitch advice from anonymous tweeters. Why not just follow the hot stock tips that arrive in your inbox every day?

steveplace2• 18 years ago

Taking trade advice from twitter is just like taking trade advice from CNBC. Dumb.

But it is a good community. Not really based on hot stock tips, more like a high-level financial community.

gwsaines• 18 years ago

Twitter has a lot of options, but I'm not sure they need to reinvent the revenue model for their system. I readily agree with MicahWedemeyer that donation revenue models are best for smaller enterprises and aren't likely to return on Twitter's VC investment dollars.

That said, what's wrong with unobtrusive adwords? Or dare I even suggest location-based ads? I know several companies have tried the whole geo-location social networking thing and failed, but perhaps Twitter has enough traction that something like that would be relevant and productive for users.

olefoo• 18 years ago

Sell the complements and degrade peripheral aspects of the free service if necessary. (i.e. a forced freemium model)

Possible focus areas:

1. statistics - fuzz out reporting after the hundredth follower and have it just say "lots"; pro membership gets you full detailed stats w/ graphs and demographics.

2. Every thousandth tweet (or every hundredth, or tenth if greedy) is an ad that shows up in the users twitter stream; pro membership makes that go away.

3. Pro Membership gets free design consultation for profile page (automated, or outsourced to art students), since most pro members will want to do their own design, this is not that expensive.

In other words, make it attractive for heavy users to pony up enough to keep things going.

jfornear• 18 years ago

Twitter could easily implement ads and let users upgrade to a premium account that would hide ads and provide additional goodies like analytics.

Just like on Flickr, people love to flaunt their upgrades.

Another interesting thing they could do would be to develop some killer add on like a location-based friend meet up deal or follower recommendation thing and force people to pay $6/mo to use it. I think twitter users would pay for anything that could help them accumulate followers or potentially meet someone new in person.

charlesju3• 18 years ago

I predict Google will pick up Twitter. Google is one of the few companies that can sustain internet businesses without a business model because anything that encourages more internet use indirectly helps Google.

In my opinion, Google is still a strong exit strategy for many years to come. Google has $7 B in cash, $29 B in assets and only $3 B in liabilities.

Of course I would never build a business with Google as an "exit" strategy, but I think that's the best option that Twitter has. Sure you can argue for the corporate spin, but I personally feel that is a weak play (like someone else said, there are a million other corporate collab startups out there already that can clone Twitter).

It makes even more sense since Evan Williams (founder of Odea, parent company of Twitter) sold his previous blogging company, Blogger, to Google.

jmackinn• 18 years ago

What makes you think that Google would have any interest in buying twitter?

You don't just get to choose who will buy you.

potatolicious• 18 years ago

Not to mention Google didn't buy any of the many webmail services out there, nor IM services... If anything Google is more likely to develop their own twitter.

charlesju3• 18 years ago

I'm not saying Google is going to necessarily buy Twitter, I'm just saying that is Twitter's best chance to exit.

arockwell2• 18 years ago

I would be more likely to agree with you if they hadn't already bought jaiku.

mileszs• 18 years ago

To be fair, you did say exactly the words 'I predict Google will pick up Twitter'.

hhm• 18 years ago

You don't sell a company, you get bought.

wastedbrains• 18 years ago

Take the ads that work in GMail and are sort of based on your conversations. Apply to twitter streams... Done, seriously I am sure it would make a decent amount of money.

If I am talking about a restaurant in Boulder and it shows me other places to eat, I might even finally click an ad on the internet.

Kilimanjaro2• 18 years ago

Sell spam at 1ct per user and split the page in two, bottom part is for spam.

Say I want to spam 1000 users, I pay $10 easy huh?

Upgrade for $5 a month and you don't get spam.

Replace 'spam' with 'ads' not to piss off everybody

netcan2• 18 years ago

easy

iamdave• 18 years ago

Someone PLEASE point me to the blog entry where Twitter announces to the world "We need some sort of model to make money". Not in those exact terms, but somewhere, anywhere, where Twitter makes some sort of reference to a long term financing model aside from investor funding.

Psyonic• 18 years ago

Just curious... why would I want to give Twitter a business model for free? Doesn't seem to make a lot of sense for me. If I came up with a good one, why not implement it myself as a competitor, or offer it to sell it to Twitter?

ram10243• 18 years ago

because we're innovators not sharks :D

and a business model is not a business, it's not going to make any money without a product. have fun with it, no one's going to make money selling ideas anyways

netcan2• 18 years ago

I think there might be an underlying questions here. They mention the Adwords gold standard. Great. Why is adwords so valuable?

Adwords it is extremely beneficial to the advertisers. People use Google to search for X. There is money to be had for being found. That's a recipe for making a lot. The other elements of how they did it right is a recipe for making a big lot. Everyone focuses on the other elements. The Google ethos. The ad algorithms. The quality interfaces, etc. etc. etc..

Adwords unlocked an underlying value to paying clients. We can't assume that there is an underlying value to unlock every time.

"Help twitter find a revenue model" may be as useful as saying "Help Billy find oil in Germany." it assumes that something is there to be found. Adwords may have been impressive miners, but even they can't milk a lizard.

nir• 18 years ago

If it has real value, it should be able to simply charge for using it. If users are unwilling to pay (no matter how little) then it's clearly not that valuable to them. If they move to something like identi.ca, and it manages to maintain a reasonable service level with negligible costs (distributed servers, open source dev modle), then that's a better solution.

"If Twitter fails to find a revenue model and hits the deadpool, it will have a chilling effect on innovation" - please. I believe I recall some innovation in pre-Twitter era and I'm pretty sure there it will continue after it as well.

cookiecaper• 18 years ago

I am astonished and sort of angry that there are actually people with these kinds of assets who would think "just loan that company $20 million, we'll figure out how to get it back later!" or even that a business would think "let's just take $20 million, we'll figure out how to pay it back later!". I guess I always thought that these places had to come up with _something_, some kind of BS about how they'll have advertisers and merchandising and make sufficient income off of that, or something similar. Apparently I was naive.

arockwell2• 18 years ago

Its not like the investors don't know the risks. I'm sure twitter has plans internally to make money and have presented them to investors.

Prrometheus3• 18 years ago

Charge by the twit.

Kilimanjaro2• 18 years ago

Bill Gates, is that you?

Prrometheus3• 18 years ago

I wish. Well, I would so wish if I could 25 year old Bill Gates.

Help Twitter Find a Revenue Model

Related Stories