Hey Twitter, wanna a few bucks
Every so often Florian Seroussi comes up with an amazing post and guest posts it here.
This one is a stonker of an idea, its comes in a week where Tweetdeck secured $500,000 investment and the channels are alive with chatter of a twitter business plan.
Begins below
The web is full of articles based on how Twitter can make some monies. Of course I don’t intent to give Twitter managers a lesson. They proved it all already. Success is no luck.
Kevin Thau – Twitter new biz dev guy must be brainstorming day and night looking on how to generate revenue for our favorite social media network.
My analysis is mostly based on observation. Don’t blame me if some of the figures are distorted. If you have them please come forward and I’ll rectify.
They are about 100 Twitter clients, 200 Twitter services and certainly a thousand of 3rd party apps or web apps posting to Twitter.
I cannot imagine one is launching a Twitter service for philanthropic inspiration only. It’s all about the money. Money around a community of users – or potentiality of revenues to be generated around this community.
Twitter founders and managers must be frustrated to see everyone else around raising money based on sending feeds or posts to their social media network.
Who provides the vital information? Twitter!!
Latest example of TweetDeck raising half a million dollar delivering messages to a FREE online service left me to think.
How Twitter can monetize their business and still maintain a free service for end-user?
Ok – I admit I have been a bit busy this week so it took me a few minutes to figure it out…but here are my thoughts.
Twitter is a carrier i.e. identical to any broadcast media. We were all thinking broadcast media = TV…here is the mistake. I’m thinking Broadcast media as THE network. Twitter IS the network. TVs are the clients – each one around a different service.
If you look at it this way you suppress direct revenue from advertising – which is certainly not very sexy today -AND you may charge for SERVICE per usage. Like a hosting company – basically Twitter hosts our Tweets and make them available to Clients.
So now imagine a business model based on:
- Bandwidth aka Twitter API Usage 80req/hour or 100req/hour or 200req/hour
- Number or Tweets posted
Twitter should SELL API usage to all of those who want to access their network. This is THE immediate revenue-generating model. Price should be based on consumption, queries, awareness, and even revenue sharing in some cases.
Give each APP the full XMPP feed from Twitter, everyone now has the exact same access.
Twitterrific is selling its application on Apple Store, generating revenue based on usage of a free API. It doesn’t sound right.
First this is taking traffic away from Twitter mobile web app [meaning no possible revenue from advertising if ever]
2nd it requires more constraint on API and therefore induce a cost for Twitter.
In this case Twitter would be much more a service provider with revenue generated by thousand of companies.
Leave others monetize their value added service. If one thinks Twitterrific, Twhirl or TweetDeck bring a different user experience it might justify the cost. Even help those application developers to sell their apps.
Of course it will certainly lower number of Twitter apps available. But we know some are ridiculously useless or repetitive and will not survive. In any case API could remain FREE for usage <50req/hr.
There is one downside in all that – which I believe could become a great benefit…
What if the community of developers around Twitter decides to give up on Twitter?
Well I still think Twitter is strong thanks to its 2.7 million users and NOTHING else. People will use more services directly offered by Twitter: Web, mobile portal and text message…and maybe even their own Twitter desktop application if they really wanted to!!
So here it is. It certainly needs to be tuned and brainstormed but general idea is set above.
@Twitter @EV What do you think? Deal or no deal?
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17 comments...What do you think?
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Twitter: shanekny
Good logical thinking here. My hunch is that it wont get monetized for quite some time and Facebook will take them out in the next couple of months meaning there is even less pressure on them to make money.
Wow following on from my TTQT on Thursday this is a fantastic idea Florian. It seems we love twitter so much we would all pay to help out especially to solve the likes of the lag issues of last week, but something I had not thought of is the way some apps out there are charging for a free service, this Idea is fantastic!
The responses I got may be of interest. I have a feeling twitter may end up charging us somehow for the service since they have sucked us in and know it, we are an easy target, but I hope not!
Pure logic but isn’t it obvious. If someone is creating revenue of something I provide them with it isn’t any more than logical that I will expect them to “share” some of that revenue. Business 1o1 really. Unles Twitter is a charity of course
Twitter: shanekny
17th January, 2009 at 6:17 pm
Just few years ago Google was facing similar problem. They had great search, everyone was using it, but no revenue from it. After a while they came up with different things like Google Ads and it started to get them money. It might be that Twitter will be going similar way.
Great post. Thanks.
I certainly believe we will witness much more to come from Twitter.com in the near future. Will they make a few bucks? Most likely with the right direction and management.
Thank for your great comment.
@Gita yes I think Twitter is going to move in a Google like model.
I was reading a dreadful article on how Twitter should monetize their company and their best suggestion was to “sell friends” as in recommendations. Which is what services like Mr Tweet and Grader do.
I think the best option is to make a Pro version, with features they can grab from the Jaiku codebase such as Groups or comments. Also for the free version they should throw in advert tweets once every 20 or so incoming tweets.
It may b a workable proposition. But what is noteworthy is that there is very little discussion on my microblogging requires a central facilitator while blogging doesn’t. I hope we shake out an artificially created network effect when every one on Internet have the ultimate network effect.
While I personally think an advertising tweet would be a good way for Twitter to monetize, I wonder how the community would respond.
My first thought upon seeing TweetDeck is that this could really make Twitter a means to make money. For that to work though, Twitter needs to be self sustainable also.
I hope they are successful.
The way i see if, if you create a twitter client and sell it for $2, unless you become THE twitter client (unlikely) then you aren’t really going to justify your time if twitter charge anything significant for the API.
I do think they need to adopt an AdWords type model though where they pass on the expense to a long tail.
Not sure whether the Twitter API would be something worth charging for. Perhaps, but i just imagine another free API would come out and twitter would die.
I think POSTing and GETing basic data from sites needs to be free. There is value in algorithms prior to getting the data (not something Twitter does) and there is value is using data context to do something – such as relevant ads.
Just not so convinced you can change for basic data IO.
Should read …
“Just not so convinced you can chaRge for basic data IO.”
Florian – you have a good business model but I think the infrastructure would be difficult to implement at this phase.
Twitter is one of the best network facilitation tools available but I think we all under value the data derived from tweets. In the retail marketplace, choosing a product is largely an emotional process. Moods affect consumption patterns. A tweet is an emotion, a mood, or an emotional reaction. Friends and their followers are micro-societies and these social groups have patterns
Facebook Connect already shares behavior patterns with their advertisers
I think Ev, Jack and Biz should be developing an analytical tool that can be used to trend these emotions and behavioral patterns derived from tweets. This emotional intelligence can then be marketed in the same way that agencies sell high priced strategic target marketing lists.
This business model would have the least amount of disruption to the twitter operation as it exists today.
Possibly my view is a little tilted because twitter dropped a big chunk of utility here in the UK when they dropped tweets by SMS. That’s a whole revenue model there if they ever get around to fixing the deal.
But I don’t think the money will come from fee charging in some form on the average user side of the gig. I can’t remember where I got this from but a big chunk of usage on twitter isn’t down to the big users, charging on a freemium model with SLA’s based on query volumes etc. I don’t think that’s the big buck deal.
There doesn’t seem to be a great impetus there to open up their raw fire hose of data, the XMPP access. They could obviously get into peering deals and let those “proxies” out how they will pay their twitter bills, pretty much as Florian says.
I think Twitter’s pay out will come in offering quicker than “real time” data with some real intelligent filtering and trending. Think Bloomberg Professional but on the editors desk in every serious news organisation. Sure, anyone can build that sort of client and back end but twitter will always have the updates first. If they just queued all the tweets in a sort of buffer on the public side there would be some real value in getting that time critical stuff before everyone else.
We really are talking minutes at most here, but I think there would be lots of super premium subscribers to such a service and for them there would be value in keeping access as unbridled as possible, more voices = more data points to filter and more chance of getting a tweet from someone that has something people will want to hear about.
But hey, what the hell do I know.
@Steven Livingstone-Perez In most business feeds have a cost. If you want a NYT feed for commercial purposes. You pay for it. It should definitely be the same for Twitter. It raises a question of property: is content posted on Twitter Twitter’s property? I think we all agree it is.
@Maxine Implementing a charge for API usage is very simple to do. Building an analytical tool to trend emotion and behavioral patterns [lol] sounds a bit complicated to turn into cash
Thanks for your great comments. Like I said on my post – the idea is here and needs to be fine tuned. Input welcome – always.
thats great that you are talking about the twitter api,a good example of searching with the twitter api is on twiogle.com because you can search on twitter and google at the same time.