Twitter Hearts Mobile, But Where's The Money?
In an interview with The Telegraph (UK) this week, Twitter CEO Evan Williams made it clear mobile is where the microblogging service has the best chance to build a business model. He explained that the immediacy of the mobile phones makes them a natural fit for its 140-character-capped messages.
Given that most Twitter traffic is already driven by handheld devices, Williams confidence that mobile holds the key to the company's future isn't surprising. While he and other Twitter executives have been cagey about how the startup will eventually make money, he told The Telegraph there were plans "sooner rather than later" to charge brands for using the site commercially.
Noting that Twitter also already drawn lots of commercial marketing activity, he added, "I'm not worried about extracting some of that revenue for ourselves." But the main appeal of social properties like Twitter and Facebook for many brands is in their role as "earned media" as opposed to traditional paid media.
Facebook fan pages and Twitter feeds allow companies to promote products and services without having to buy ad space or time. Facebook doesn't charge marketers to set up pages or run applications on the social network. It's relying so far on more traditional types of digital advertising as well as things like selling virtual goods to make money.
So if Twitter tries to start charging companies in some form for doing business on the service, it could run into resistance. Brands have come to associate social networks with viral campaigns, "friending," gaining followers, and driving engagement, among others buzzwords. But not paying upfront for any of these things of intangible value.
Twitter will have to carefully consider, as the company already appears to be are, how and what they can "extract revenue" from marketers without driving them into the arms of arch rival Facebook.