How giving Twitter away can make it money

You may have noticed that we've started to get much more involved with Twitter. That's partially my fault - I'm a certified addict - and partially recognition by everyone involved that Twitter has become a very important part of the online environment.
Written by Rupert Goodwins, Contributor

You may have noticed that we've started to get much more involved with Twitter. That's partially my fault - I'm a certified addict - and partially recognition by everyone involved that Twitter has become a very important part of the online environment.

Twitter has turned into one of the most intriguing experiments in social networking of the new millennium. It can simultaneously engage the world in an authoritarian conflict, and let me explain to a receptionist why her telephone wasn't working (more on that later).

What it can't do, seemingly, is make any money.

That's not a unique problem. But Twitter is a particularly fine example: it provides a unique service which is entirely inimical to advertising. It's very personal and designed to fit into the small change of the day, moments you can spend on yourself and are thus extremely precious. Intrusions break it.

Yet it wouldn't work if it wasn't free to its users. And freemium doesn't work – if there are extras you fancy in Twitter, you get them with the many software packages created entirely independently of the service. Moreover, it takes time to get Twitter – until you start to build your personal network, it seems pointless and confusing, random strangers saying silly things. Who's going to pay for that? Moreover, Twitter's biggest splash to date – the Iranian coverage – would not have happened if people hadn't been able to connect for free.

All the standard models of raising revenue fail.

The key to making money has to reflect the key value of Twitter – which is other people. And they can't be expected to pay for the privilege of being valuable to you. On the other hand, you may be prepared to pay for them. People like giving, when it's to those you care about. But for something as seemingly transient as Twitter it can't be very much money – ideally, you'd be dealing in pennies, not pounds. As we know, though, online micropayment schemes don't work. The overhead in time and expense soon overwhelms the revenue. Micropayment only works in the real world of coins and loaves of bread. The social world.

So here's an idea: social microcredits. For people who really get Twitter, the idea of spending, say, six pounds for a year's subscription is not excessive. Fifty pence a month – or a dollar – is an easy decision for anything you use and appreciate every day.

In return for that fifty pence a month, you get a Twitter account that works exactly as it does now – the one for which you currently pay nothing. The only difference is, you also get five other Twitter accounts you can dispose of as you wish, good for a year but open to you to reallocate at a month's notice.

You could sell them to your pals for ten pence a month – or a pint a year – and you'd break even. You could give them to friends and family, so they can get stuck into Twitter and see whether they like it or not. You could give them back to Twitter, as part of a pool of free credits for it to use in promotion, or Iranian bloggers, or whatever scheme it has – if you approve of it. Or you could give them to any other organisation with a good enough shtick.

Why bother? There are three reasons. The first is that people like to pay for things they find valuable. It assures supply, it increases your own sense of worth, it is a signal of your priorities and your involvement. Here, you're not just paying for the service but the community, in a way that raises your status within that community. The second is that you have control of your account. You've paid. It's yours. The third is that you start to have an investment in how the community grows; you've acquired a small but useful say in how things are.

Anyone who's on a free account can, of course, sign up for the six pound deal: you get the account back and they get five donor accounts of their own. The service grows, and Twitter gets more money – as well as a core of involved users.

In effect, a community barter economy is created, managing credits without centralised accounting. For as long as there's a six to one ratio of free users versus paid-fors, Twitter effectively remains free to join and sample, and for the devoted freeloader who doesn't mind taking the chance of not getting another free credit every year there's no need to pay, ever.

There are lots of unknowns, of course, and many variables and variations on the theme. A 'Pro' badge for paid-for accounts. Other bundles. Different revocation models. But the basic idea has the best chance of any of matching what Twitter gives people with what they are prepared to give back, without breaking the drivers that have made it such a fascinating and, increasingly, important innovation. And in the end, any social network will have to figure the social aspects of its service into its revenue model – that's what it's selling.

(Oh, and the receptionist with the broken phone? I was visiting the BBC, and asked the receptionist to call the studio and let them know I'd arrived. She tried, but the phone wasn't working – and there was no way for her to find out why. As I sat in reception filling in time, I read a tweet from the BBC's technology correspondent, in the same building at the same time, saying that the new VoIP phone system had gone down and was being fixed. I showed this to the receptionist, and we made other arrangements. "Is that the same Twitter that's in Iran?" she asked, astonished – and another fan was made.)

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