Welcome To TomsTwitterBlog….Or so it seems lately.
Seriously though Twitter CEO Evan Williams gave a talk which was covered by Rafe Needleman. Mr Needleman in turn wrote a post that put the focus on the revenue portion of that talk and so the topic of how Twitter ever expects to turn a profit has come up. I've already spoken a little bit about this here but I wanted to address the suggestions being made in the blogosphere to show just how dire I think Twitter's situation is. First from Alan Patrick who gives four suggestions...
(i) Add payment plans if one has above a certain number of follows - say 1,000. At least the serious spammers would pay.
One needs only look at this post by Robert Scoble to see why the above idea won't work. The problem Twitter has is that it grows virally so penalizing those people who are essentially driving its growth just wouldn’t go over well.
(ii) Follow the CyWorld, Habbo, Flirtomatic models and sell little things in bulk that people can give each other
This could work to some extent but since a lot if not most of Twitter’s traffic is driven by third party applications I doubt it would generate anything significant. Because third parties are already handling most of the little things. Twitter’s service is so simple that there just aren’t that many little things available to monetize.
(iii) Have a "give us some love" option so people can donate to Twitter at times of extreme delight.
This too might generate a very, very small amount of income but the reality is that most people donate to non-profits or individuals. A for-profit company asking for donations isn’t going to get much.
(iv) Sell Ads on the user landing page - I don't think anyone would object to a Pagetop Ad where the Home etc are now, and on maintenance pages if they knew it was in a good cause (ie their free service). easy on the intrusive datamining, just general stuff for the demographics.
This again goes back to the third party application problem. A lot of Twitter users don’t even visit the main page anymore and as it becomes more popular that number (as a percentage at least) will shrink because the offerings will get even more compelling.
Finally, one suggestion made by Mark Evans in his post on the subject…
My sense is Twitter will go corporate by trying to sell an enterprise version that comes with more features and a more reliable performance than regular Twitter. Twitter’s acquisitions provide some insight into where it might be headed. This would leave regular Twitter as a showcase/loss-leader and a way to bring a broad audience into the Twitter community.
This has been the holy grail of Twitter lovers for a while now. The idea that Twitter will set the Enterprise world on fire and rake in the profits. An “Enterprise Based Twitter Clone” even won the Techcrunch50 conference this year.
But the truth is…it isn’t going to happen.
There was a time when corporations were looking for new communication technology but that time passed when Intranets became common place. Now IT managers are looking for ways to cut down on the noise because there’s so much information out there to consume (which is starting to seriously eat into productivity time). For all Twitter’s good traits even their most strident supporters admit it generates a lot of noise.
Also remember that most people aren’t as open about what they’re doing when it comes to their job. In other words, John in Accounting wouldn’t want to Tweet “Starting Monthly Numbers Now” because he might decide to spend 40 minutes in the copy room chatting with Sally. So he wouldn’t want to give a documented time as to when he began his actual work for fear of questions as to why he isn’t done yet. No one wants to be micromanaged and that’s exactly what an Enterprise Twitter would lead to.
I’ll admit I don’t have an answer here. I honestly don’t know why Facebook offered what it did (other than Facebook seems to see no value in actually generating revenue). But if Twitter is going to generate enough money to survive I think the solution will need to be a groundbreaking one.