Creating a Twitter Business Model
Originally posted December 17, 2008
In the past couple of months there has been a swarm of activity surrounding
Twitter and their business model. Many have said that twitter needs to monetize quickly before they become desperate and end up being acquired or competitors with backing surge ahead of them. Just two weeks ago Facebook offered to buyout Twitter for a cool $500 MM (even if it was in largely in Facebook stock). This whirlwind of activity got me thinking as to what business model makes the best sense for twitter. Here are some basic models that I came up with;
Subscription Service: Basic messaging would continue to be free, but a model that involved unlimited file hosting and exclusive features could garner $5-10/month. Imagine being able to upload your pictures, videos and music right into the twitter client as opposed to linking out to an externally hosted file. It could be the best of Flickr, YouTube, iTunes and Blogger right in one application. Jason Calacanis has suggested this before.
Corporate Accounts: Any business that wanted to promote their wares on twitter would be required to sign up for a paid business account. Business accounts could allow for users to purchase products right through the twitter interface without having to leave the site. Businesses would also have access to a greater tool set that would allow them to ‘listen in’ on conversations and create an outpost for their brand. In addition, business accounts could have access to deeper demographic information of users and followers.
Twitter for your Domain: Another great business application of micro-interactions is it’s use in the corporate setting. There are a number of businesses that I know of that use twitter or yammer to update project statuses, ask questions and communicate with co-workers. Twitter could offer a subscription model that would allow businesses to install their service on a private network that keeps confidential and proprietary information out of the public’s view.
Ad Supported: Twitter could very easily monetize (just like Adwords) tweets based on their relevance to a particular keyword, product or service. To me, the ad supported route always seems like the lazy way out – hey, we can’t be original and come up with something new so let’s just fold to the pressure. I’d hate for twitter to take this route, but I wouldn’t blame them if they did.
No Business Plan: I’m also on the other side of this argument. Does twitter HAVE to make money? Could it be a loss-leader for the company that finds its revenue from it’s other future products (acquiring TinyUrls)? Google has done this beautifully. Twitter has a lot of potential, why couldn’t they take the same route?
What are your thoughts? Do you think twitter needs to have a business model? Do you agree with some of my ideas or are they crap? What other ways do you think twitter could squeeze out a profit?
