Thursday, June 18, 2009

Twitter will be very monetized.

It's been argued by some that Twitter won't be able to monetize its services and create a profitable business model. I completely disagree with this assertion. To prove my point, I took just 15 minutes to brainstorm potential revenue-generating activities for Twitter. I organized my thoughts by loosely clustering different ideas around general concepts.

Here is what I came up with in 15 minutes:

Clearly the ideas range from widely known to absurdly illogical. But if it took me only 15 minutes to come up with a few reasonable thoughts, I'm quite sure that teams of well paid professionals will come up with a good way to make money from Twitter.


  1. Hmmm.... Can't say I agree with you on this. Here's why: the value of Twitter is almost completely created by its users and their tweets. Aside from providing a platform for tweeting, Twitter itself brings very little to the table. Subsequently, any attempt to derive compensation from users is likely to result in an exodus from the platform to another, freer one.

    To put it differently, Twitter is nothing more than empty vessel in which users deposit the value they are creating. The vessel itself provides very little value beyond its ability to hold the value created by others. If the vessel begins to charge for this "holding" service, users will simply find/create a vessel that doesn't.

    This is noticeably different from other popular sites that actively participate in the creation and contribution of content (value). Facebook has its apps, Hulu has its copyrighted shows, online newspapers have their articles, etc. Twitter offers none of these. It offers only storage.

    Does this mean that Twitter will never generate revenue at all? No. However, it does suggest that Twitter would likely to have a difficult time generating revenue from its end users - essentially, trying to convince them that THEY must pay for the right to contribute value. (If anything, payment should flow the other direction.)

    Of course, Twitter will likely be able to make some money on ads (and other sources that don't charge the end user directly) but as any online publication will tell you, these sources are fleeting, and much more of a revenue trickle than a flood.

  2. I love and appreciate the push-back :)

    I agree with you that a purely membership-fee model for all users is probably the most difficult to implement monetization idea. But charging those who use the site to either directly or indirectly profit from the site should be easier.

    For instance, celebrities use Twitter as a vehicle to broaden their fame and to directly reach their audience. In this case, Twitter is more than just a generic platform - it's a tool that allows one-to-many communication.

    Twitter is introducing verified accounts that vouch for a person's identity, which celebrities and companies will benefit the most from. I think these verified accounts might naturally begin to identify those users willing to pay a fee for reaching a wide audience. I also think that it's within these types of services where there is room for Twitter to begin considering monetization from a membership fee model.