How will Twitter make money? (A web 2.0 conundrum)

How will Twitter make money? (A web 2.0 conundrum)

Summary: How will Twitter, the hugely popular micro-blogging service (among the tech-savvy crowd anyway), make money?

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How will Twitter make money?How will Twitter, the hugely popular micro-blogging service (among the tech-savvy crowd anyway), make money? That's the polite version of the question posed today by Allen Stern over at his CenterNetworks blog. Stern writes: "As Twitter usage has grown, have they f'ed themselves out of a real, sustainable business model?"

Twitter doesn't charge for use of the service, though there can be some costs associated with sending SMS messages (with both Twitter and users footing the bill depending on whose sending and which country they're based). Additionally, Twitter doesn't (yet) serve ads -- and to make matters worse, many of its regular users access Twitter through third-party clients, such as Twitterific, which utilize Twitter's own free APIs.

Stern continues:

Most of the heavy Twitter users use the service via the API and "offsite". I actually use the Web site and refresh the page every few minutes while I am at home. How can they monetize the API usage? If a Twitter user already paid $15 for a piece of [third-party] software, would they then be willing to pay Twitter for their account? It's like paying for mIRC and then having to pay for the use of IRC itself.

In a fun post on his own blog, Dave Winer responds by saying that there are far harder problems than this particular web 2.0 conundrum (my words not his).

When I was in college, professors used to ask questions that are much harder than the question Allen Stern asks in this piece.

The NY Times crossword puzzle is harder.

Geez, installing a new hard disk in a MacBook is harder, and as I've found out that's pretty easy.

According to Winer, Twitter has a number of potential business models, all of which rely on the service acquiring a large enough user base in the first place.

  • Become a distributor of third-party apps and services that use Twitter and take a cut in return.
  • Design and sell hardware such as a cellphone with "Twitter baked in".
  • Or, better still, partner with mobile device makers and carriers to offer superior Twitter integration.
  • And finally, sell the service to a carrier.

The first and third suggestion seem the most viable. Setting up a Twitter products and services store would be similar to Skype's shop that sells USB phones and other products that utilize Skype's API. And partnering with mobile carriers seems a "no brainer" and might provide a way to reduce SMS costs. Although, as Winer also points out, making Twitter more stable should be a first priority.

Topics: Mobility, Browser, Collaboration, Hardware, Social Enterprise

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16 comments
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  • Answer is easy: It won't.

    "Here comes another bubble..."
    http://youtube.com/watch?v=YuAJHaXKgFk
    PB_z
    • Not so

      That's a tad superficial don't you think? I believe a LOT of people would be willing to pay for the service, especially if it meant they were not going to be polluted with adverts.
      dahowlett@...
      • RE: How will Twitter make money? (A web 2.0 conundrum)

        @dahowlett@... plz visit www.loversdiary.co.cc
        you will get some tips about how to earn money.
        veto143
    • RE: How will Twitter make money? (A web 2.0 conundrum)

      It is really easier than you think to make money off of twitter once you know what you're doing, I own an amazing piece of software that does all the work for me and makes me an extra $400 a month online and I'm willing to share that software with you, read about it at http://moneywithtwittenator.blogspot.com it's really incredible
      bcbella
  • Start charging money.

    Easy answer.
    3dguru
    • RE: How will Twitter make money? (A web 2.0 conundrum)

      @3dguru plz visit www.loversdiary.co.cc
      you will get some tips about how to earn money.
      veto143
  • RE: How will Twitter make money? (A web 2.0 conundrum)

    What about SMS txt ads? This will not only reduce the SMS cost but also offer a new revenue stream! All they need is to find advertisers.
    t_jamous@...
  • RE: How will Twitter make money? (A web 2.0 conundrum)

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  • RE: How will Twitter make money? (A web 2.0 conundrum)

    Really? design and sell hardware? That's your suggestion? They can barely keep their servers up, I don't think they quite have the expertise (forget resources) to start selling hardware.

    All of your other suggestions would kill Twitter instantly, or are otherwise just laughable. The reason people use Twitter is the same reason Twitter stays out of your way (and pocketbook). There are hundreds of equivalent services (stumbleupon, friendfeed, identi.ca, facebook has had status updates for years) that offer the exact service that twitter has (usually more) and it's *really* easy to switch: users have nothing invested in Twitter's service, just the 30 seconds they took to setup their accounts. Limiting third party applications would kill the very community that makes it popular.

    Twitter isn't the only company that can keep a database of sentences. There really is no business model. If a carrier wanted to make use of a Twitter-like service and Twitter made them pay they could erect their own service in a second, or just use another of the many popular existing services.

    The only *real* option Twitter has as a company is to take this service as a complete loss on the books, start a company that does something completely orthogonal (some ad based social site? e-commerce?) and use Twitter to market it.
    joewoah
  • RE: How will Twitter make money? (A web 2.0 conundrum)

    Are you for real!? making like its so hard.. all they have to do is put a ad-tweet in your tweet feed every twenty tweets... Bingo!

    Sam
    http://www.thedealchain.info
    thedealchain
  • RE: How will Twitter make money? (A web 2.0 conundrum)

    I don't know how they make money, but I know how you can!
    http://revtwt.com/index.php?id=22369
    http://www.howtomakemoneyonlineresource.com
    elshiggity
  • RE: How will Twitter make money? (A web 2.0 conundrum)

    "Become a distributor of third-party apps and services that use Twitter and take a cut in return."

    http://www.twtscripts.com/eBook.php

    Actually this method is described in this free book
    It is about selling twitter scripts that enhance twitter experience

    Aside those off-twitter businesses there a the strong push of affiliates making twitting almost difficult
    Jozep
  • RE: How will Twitter make money? (A web 2.0 conundrum)

    I don't think if the proposed idea are viable business models. What twitter has today which is really valuable is kinda a raw data. They will be able to monetize the data if they can somehow turn it into structured data.
    aboostani
  • RE: How will Twitter make money? (A web 2.0 conundrum)

    Sure , twitter make money
    I use train script http://www.newfollowers.info
    and everyday i recevied money from twitter users.
    I suggest to try it. and if you have 60$ you can creat site that will do that
    buttoz@...
  • RE: How will Twitter make money? (A web 2.0 conundrum)

    Entire Social identity comes with http://socializedcard.com
    twistamp
  • RE: How will Twitter make money? (A web 2.0 conundrum)

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    Maria Rivera