Commentary

Twitter Finally Has a Business Model ... Not!

by Catharine P. Taylor , February 11, 2009

For me, this week will always be remembered as the one in which Twitter almost had a business model. To recap, a few news headlines from the last several days:

Twitter denies reports that it will charge firms.
Twitter won't charge for existing services.
Surprise! Twitter still thinking about a revenue model.
Biz Stone: "Twitter will remain free to use by everyone ...

Are you still with me? Good. I'm not still with me, either.

Whatever it is, it all started when Biz Stone, the same Biz Stone who said "Twitter will remain free to use by everyone ... " was quoted by the U.K.'s Marketing magazine saying: "We are noticing more companies using Twitter and individuals following them. We can identify ways to make this experience even more valuable and charge for commercial accounts." Call me crazy, but that sounds like Twitter is planning to charge for commercial accounts.

As everyone, even people who've never heard of Twitter, would like to be the first with the story of what Twitter's business model will be, the media and blogosphere jumped all over this alleged scoop.

Finally, Stone decided to say something else. Under the headline, "Nothing To Report Just Yet," he wrote a post yesterday on the Twitter blog which says the following: "...it's important to note that whatever we come up with [in terms of a business model], Twitter will remain free to use by everyone -- individuals, companies, celebrities, etc. What we're thinking about is adding value in places where we are already seeing traction, not imposing fees on existing services. We are still very early in the idea stage and we don't have anything to share just yet despite a recent surge in speculation. When we do, we'll be sure to let you know."

Oh, OK. So Twitter will remain free for everyone, but it won't impose fees on existing services, which means that it won't remain free (except for being free for everyone), because Twitter will charge for services that don't yet exist.

Got it? I'm glad you don't either. If you do, please decode by commenting below. I don't think Biz Stone would thank you, but I would.

(P.S. For even more fun, I'll link to two un-related stories about Twitter this week: this feature in New York magazine which breaks the news that no one at the company plays a lot of foosball; and this subscription-not-required one from The Wall Street Journal about tonight's Shorty Awards, the non-Twitter originated awards show that will honor the best Twitterers ... uh Tweeters. @MCHammer will be there.)

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15 comments about "Twitter Finally Has a Business Model ... Not! ".

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Alex Czajkowski from eGaming 2.0 Ltd, February 11, 2009 at 1:53 p.m.
Geez, which part don't you understand? Twitter has tapped into the online sms/add/narcissist "need" in (some) people and say they'll continue to allow use as we know it free. Cool. SO how do they monetize it? Let me count the ways... as someone who represents "corporate" clients on twitter, we'd love tools that help us more easily find our clients' customers, prospects, fans, suporters, etc. They CAN do that, the CAN charge for it, and we WILL (gladly if it works) pay. So no conflict.. and you DON understand: "because Twitter will charge for services that don't yet exist." Works for me--they've only scratched the surface so far.
Reply

Mike Spring from Voice Coaches, February 11, 2009 at 2:07 p.m.

Do our responses have to be 140 characters or less?

Monica Bower from TERiX Computer Service, February 11, 2009 at 2:15 p.m.

It's simple. You send them your old gold jewelry and they send you a free credit report. Where is the confusion?

Gerard Mclean from Rivershark, Inc., February 11, 2009 at 2:22 p.m.

God help us. Just establish two levels of service. Free for the masses, limit to 100 tweets a day and $10/month for the rest of us, unlimited use. Not hard.

Now get on with it. And let me know where to sign up for the paid stuff.

Ulrike Langer from medialdigital.de, February 11, 2009 at 2:33 p.m.

I agree with Alex. It's not that difficult to understand - and I'm not even a native speaker. Biz Stone's original comment was surely misleading, but he cleared it up. Only additional services which don't yet exist will be charged - eventually. And these services could be a hundred different things - more than 140 characters, more than one link option on the profile page, targeting tools for advertisers, tips from Twitter who to follow (which can bought), every 10th tweet a user sees is an ad etc., etc.

James Gunaca, February 11, 2009 at 2:57 p.m.

I think they will just roll out additional services that they'll charge people for. Perhaps insight into how many people are reading your tweets (so companies can measure effectiveness and reach of tweet campaigns, for example).

They'll have a business model and it will make money. Twitter is definitely not a YouTube.

Jeanne-elise Heydecker from Icronex Technologies Pvt. Ltd., February 11, 2009 at 4:27 p.m.

If they decide to charge companies for "additional" services, everyone knows that it's your private data. If I follow Chevy for example, Chevy would love to know my email, and whatever else they can glean from the experience. They might pay up to $50/email for that highly targeted a list... actually, the higher the pricepoint, the higher the price per email... Could be quite lucrative. The idea of "consumer insights" is all too vague and fuzzy for me as an in-house marketer, but that email - that's concrete and well worth parting with my marketing budget dollars. Privacy be damned! :-)

Leyla Arsan from Lotus Marketing, February 11, 2009 at 4:29 p.m.

As someone who uses Twitter frequently but cannot seem to really "get" twitter, I encourage you to follow me @luluinatutu

Jeanne-elise Heydecker from Icronex Technologies Pvt. Ltd., February 11, 2009 at 4:30 p.m.

Oh, one more thing - If Twitter enabled payment through their system, because of the huge popularity of mutli-device Twitter users, they could corner the market on mobile payment processing and license their tech to everyone else.

Just a thought...

Robin Caller from LOLA GROVE, February 11, 2009 at 6:18 p.m.

I dont care if they have a business model or not, and neither should any of you. Get over "watching" - get over "voyeurism" for a moment - get out of your jacked in screens for a little moment and ask yourself a fundamental question - is this service making my life more real? NO! It's a rubbish, nonsense, tiddle-taddle stupid way to "be more important" than we really are. The goal of online media agencies and brands is not to jump on the bandwagon of everything that "joe stupid" does for a new york minute. It is to filter, and ask whether this dumbass service is any more valid than the 4 blade shaver? Robin@goallover.com

Jonathan Hall from American Pop, February 11, 2009 at 6:59 p.m.

Great article and great comments. Twitter has incredible momentum and will figure out a way to monetize that doesn't ruin the user experience, much like Google did. We find that Twitter is the ingredient in our Social Media campaigns that ties the other engagement channels (Blogs, Facebook, Message Boards, etc.) together. It couldn't be more opt in, so you have to make sure what you're offering is of value and interesting. I think everyone should sit back and enjoy the ride of seeing what happens next with Twitter. In the meantime, our clients are enjoying what they're seeing.

William Houghton from Project Amuso, Ltd., February 12, 2009 at 9:20 a.m.

Seems pretty clear to me. "Twitter will be Free" doesn't mean there won't be value-add services that are for-pay. (I can go to a concert in the park for free -- but I'm still charged to buy a program or a drink. I don't complain.)

My guess is Twitter has/is identified certain advertising/marketing services that it considers value-add, and not core to the user experience. These can be charged, and I doubt anyone would be surprised.

Michael Smith from State Bar of Michigan, February 12, 2009 at 10:24 a.m.

Twitter or Fritter? Who needs to know when someone sneezes three states away? When a twitterer twitters where is their attention? Sounds like silicon attention deficit disorder.

Adrienne Obrien from NYIT, February 12, 2009 at 11:25 a.m.

Check out David Pogue's take on Twitter in today's Times.

Lois Wingerson from CMP Medica, February 12, 2009 at 9:54 p.m.

Alex is correct. All of the businesses that are trying to market on Twitter want ways to target, and Twitter will provide it. This may be Web 2.0 but that's Web 101.