ElectricSpectre

Y’know Twitter?

Of course you know Twitter – everyone and their mum seems to be micro-blogging their way to personal fame and fortune these days. But what you might not know is that Twitter hasn’t yet earned itself a single red cent.

That’s right. It’s easy to imagine twitter-millionaires (I hesitate to use the word ’twillionaires’ because the arbitrary forcing of ‘tw’ in front of a word in the context of Twitter makes my spine want to telescope) lounging around on yachts and toasting their own success, but the fact is that Twitter survives on investment alone. Needless to say, investment hasn’t exactly been hard to secure – apparently Twitter is worth around $1 billion these days – but this does force us to question where exactly it’s all headed…

Investors might love being part of the 2.0-revolution, and they might get a giddy thrill when they think about just how net-centric (or some other made up term) they’re being investing in the ‘new model’, but somehow I suspect they’re in this whole investment game for the money. Naturally with the web being the hyper-competitive creativity-machine that it is, it’s only a matter of time until someone comes up with something better, cooler and faster than Twitter. (and that features more big reflective buttons) Therefore the crusty old investors are probably going to want to see some return on their millions sometime soon.

Twitter.com states in the FAQ that they have many appealing opportunities for revenue but that:

“we are holding off on implementation for now because we don’t want to distract ourselves from the more important work at hand which is to create a compelling service and great user experience for millions of people around the world.”

Problem is, they’ve done that. Very, very well. But how do you turn that user-satisfaction into hard currency?

Twitter has to be monetised. Easy right? Not at all. Let’s think about this for a second. How could Twitter actually make some cash out of what they’re doing?

Option 1: subscription-based Tweeting. Obviously this couldn’t work, because Twitter needs to have as many people on it as possible in order to work at all. And they won’t use it if it’s not free, or someone will come up with something identical but free that people will hop on. The future is free, freemium, and other buzzwords, blah blah blah.

Option 2: advertising. Perfect, yes? Pop a few ads in the Twitter feed and bobs-your-uncle, instant revenue. It would work. But only if you put aside the fact that advertising space, no matter how desirable is going to offset the costs of running one of the words biggest online companies. Seriously, thinking about the square milage of server-farm space Twitter must occupy makes my spine want to telescope. (Yes, I will be using this piece of imagery at least twice every post) But there’s a bigger reason why advertising won’t work on Twitter:

3rd party apps.

Twitter being very free and loose with it’s API means that a whole subculture of third-party developers are busily working away on providing neat, sexy ways of doing your Twitter business, whether it’s managing multiple accounts from one spot, or performing bulk unfollows that the regular site won’t let you do. If Twitter rely on advertising, then it’ll be on their site, and so they’re going to need you to be on their site, whenever you use Twitter. This means no Tweetdeck, no Twitteriffic, no 3rd party nonsense whatsoever. This is simply not feasible because these 3rd party apps are already entrenched, and used by thousands. You can’t shut down all of them without restricting use of the API, which would have all sorts of crazy consequences. The actual Twitter site kind of sucks, which hasn’t been an issue because so many users are getting their fill from their mobiles or from other websites. Shut these down and you’re left with a fairly impotent service. Of course they could expand the actual Twitter site, release an ‘official’ Twitter app for mobiles, and try and claw users back to using the twitter.com service, but to be honest it all sounds kind of difficult. It also sounds kind of mean, shutting down all that third-party creativity that’s been allowed – thus far – to produce some pretty cool stuff.

If anyone has any ideas about how to successfully monetise Twitter, let me know in the comments box and I’ll ring up Biz Stone and let him know.

-BREAKING NEWS-

As I was writing this article, news came in that Twitter has confirmed they will be offering paid business accounts as part of their money-making strategy. To my understanding, this means providing extra services like analytics and stats on your profile. My first impression of this is that it will also suffer because of third-party apps, that deliver every factoid you could possibly want about your Twitter account (see twittercounter for example) for free.

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