A Business Model for Twitter that Won’t Work (and then one that will)


Fans of Twitter have openly wondered how they’re going to make money. They have over 2 million users (and growing), a rabid fan base but still no revenue. This is common among Web 2.0 companies; get the audience and then figure out how to monetize later. I keep wondering when the later will be.

I started to think I had figured out how to monetize twitter; but later figured out it would fail. Here is how the thought process went.

  1. The strength of Twitter is its power to provide real time recommendations making everyone a conduit for marketing.
  2. I thought you could assemble Twitter super users and then have them review products/services. If the product/service passed the litmus test then they would forward it on to others. And so on . . .
  3. The business who was being recommended would pay Twitter for the traffic that they received and maybe a percentage of what was purchased and Twitter would share that revenue with their users.
  4. Users would be able to bring products/services to the table and then have Twitter go create a relationship with them ahead of time.

Sounded good at first and then I quickly realized that it would fail due to the following reasons.

  1. To put a product up for review would not be an honest review. It would be contrived. Intent is everything.
  2. If someone wanted to recommend something but wanted Twitter (and themselves) to get paid, they would have to wait until Twitter created that relationship. Twitter is real time and needs to be so.
  3. Twitter as a conduit marketing tool is completely dependent upon discovery. Just as the internet, broadcasting information to people does not really work as it and Twitter are an on-demand medium. Twitter is broadcast but you’ve elected to receive someone’s broadcast. Again; on-demand.

I now believe they should go with the flickr model of charging $1 a month. (I pay flickr $2 a month to house all of my 3,000+ photos.) I would skip the freemium model completley to keep the experience ad free. Rabid fans won’t mind paying and that would be $2 million + a month. Not a bad start.

UPDATE: I just saw this post on TechCrunch that discusses how much Twitter users would be willing to pay.

By Michael Myers