
Help Twitter Find a Revenue Model - qhoxie
http://www.readwriteweb.com/archives/help_twitter_find_a_revenue_model.php
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run4yourlives
_If Twitter fails to find a revenue model and hits the deadpool, it will have
a chilling effect on innovation. That matters to all of us in the innovation
economy. Sure, you could live without Twitter, but what about the funding
chances for that brilliant idea of yours?_

Hmm... the idea isn't so brilliant if I can't find a revenue model either.

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charlesju
I predict Google will pick up Twitter. Google is one of the few companies that
can sustain internet businesses without a business model because anything that
encourages more internet use indirectly helps Google.

In my opinion, Google is still a strong exit strategy for many years to come.
Google has $7 B in cash, $29 B in assets and only $3 B in liabilities.

Of course I would never build a business with Google as an "exit" strategy,
but I think that's the best option that Twitter has. Sure you can argue for
the corporate spin, but I personally feel that is a weak play (like someone
else said, there are a million other corporate collab startups out there
already that can clone Twitter).

It makes even more sense since Evan Williams (founder of Odea, parent company
of Twitter) sold his previous blogging company, Blogger, to Google.

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charlesju
I'm not saying Google is going to necessarily buy Twitter, I'm just saying
that is Twitter's best chance to exit.

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mileszs
To be fair, you did say exactly the words 'I predict Google will pick up
Twitter'.

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charlesju
lol you caught me, I'll give it a 51% chance of happening.

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qhoxie
I don't actually agree with their lead in quote. Twitter has taken a stupidly
simple idea and become the center of attention in the circles of tech
entrepreneurs and many of others. Things like Yammer come and piggy-back off
of it and it grows into it's own sort of ecosystem.

The only effect of Twitter going into the deadpool would be shock about how
they could have possibly blown their momentum.

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bootload
_"... Things like Yammer come and piggy-back off of it and it grows into it's
own sort of ecosystem ..."_

There is one source of revenue - licensing usage to other companies. I'm not
quite sure why they haven't struck deals with companies like Yammer?

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qhoxie
It is too simple to recreate, that's why. Especially on a small scale like a
per-company basis.

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MicahWedemeyer
Is perpetual VC funding not a viable business model?

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ram1024
hehehe that's cute

here's a novel one i thought up. Social Donation System. how it works is,
users can log in and make donations, and the level of contribution is
reflected by their profile. this is gauged against the average level of
contribution of other users making a curve.

so people who don't donate might have a red light by their tweets or
something. people that donate a little get a yellow, people who donate an
average amount get a green light. people who go above and beyond get a blue
star or something special to show that they have made an exceptional effort to
support the community.

have it calculate daily or something non-intensive, but make sure as with all
donation systems that everything is 100% transparent to users. it could work

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MicahWedemeyer
Nothing against donation-ware, but I don't think it works as a big money-
maker. IPOs and acquisitions come from companies that are making revenue based
on some sort of sale (even if it's sale of ad space).

There has to be some aspect of "keep paying me or I remove the benefit you're
getting"

Donation-ware is great for single developers, not so great for startups
looking to make sustainable revenue.

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ram1024
i really wasn't thinking about making tons of money, but more sustaining and
growing the community hand in hand style

if you want to make tons of money, simply billing the users is enough. don't
charge the people who follow, but charge anyone who sends messages.

done deal.

not terribly interesting though :D

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MicahWedemeyer
Unfortunately, VCs do care about making tons of money.

Twitter could do very well (and support a small happy staff) based on the
model you describe. The investors would be none too happy about it, though.

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Psyonic
Just curious... why would I want to give Twitter a business model for free?
Doesn't seem to make a lot of sense for me. If I came up with a good one, why
not implement it myself as a competitor, or offer it to sell it to Twitter?

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ram1024
because we're innovators not sharks :D

and a business model is not a business, it's not going to make any money
without a product. have fun with it, no one's going to make money selling
ideas anyways

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Kilimanjaro
Sell spam at 1ct per user and split the page in two, bottom part is for spam.

Say I want to spam 1000 users, I pay $10 easy huh?

Upgrade for $5 a month and you don't get spam.

 _Replace 'spam' with 'ads' not to piss off everybody_

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netcan
easy

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jfornear
Twitter could easily implement ads and let users upgrade to a premium account
that would hide ads and provide additional goodies like analytics.

Just like on Flickr, people love to flaunt their upgrades.

Another interesting thing they could do would be to develop some killer add on
like a location-based friend meet up deal or follower recommendation thing and
force people to pay $6/mo to use it. I think twitter users would pay for
anything that could help them accumulate followers or potentially meet someone
new in person.

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netcan
I think there might be an underlying questions here. They mention the Adwords
gold standard. Great. Why is adwords so valuable?

Adwords it is extremely beneficial to the advertisers. People use Google to
search for X. There is money to be had for being found. That's a recipe for
making a lot. The other elements of how they did it right is a recipe for
making a big lot. Everyone focuses on the other elements. The Google ethos.
The ad algorithms. The quality interfaces, etc. etc. etc..

Adwords unlocked an underlying value to paying clients. We can't _assume_ that
there is an underlying value to unlock every time.

"Help twitter _find_ a revenue model" may be as useful as saying "Help Billy
find oil in Germany." it assumes that something is there to be found. Adwords
may have been impressive miners, but even they can't milk a lizard.

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iamdave
Someone PLEASE point me to the blog entry where Twitter announces to the world
"We need some sort of model to make money". Not in those exact terms, but
somewhere, _anywhere_ , where Twitter makes some sort of reference to a long
term financing model aside from investor funding.

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olefoo
Sell the complements and degrade peripheral aspects of the free service if
necessary. (i.e. a forced freemium model)

Possible focus areas:

1\. statistics - fuzz out reporting after the hundredth follower and have it
just say "lots"; pro membership gets you full detailed stats w/ graphs and
demographics.

2\. Every thousandth tweet (or every hundredth, or tenth if greedy) is an ad
that shows up in the users twitter stream; pro membership makes that go away.

3\. Pro Membership gets free design consultation for profile page (automated,
or outsourced to art students), since most pro members will want to do their
own design, this is not that expensive.

In other words, make it attractive for heavy users to pony up enough to keep
things going.

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nir
If it has real value, it should be able to simply charge for using it. If
users are unwilling to pay (no matter how little) then it's clearly not that
valuable to them. If they move to something like identi.ca, and it manages to
maintain a reasonable service level with negligible costs (distributed
servers, open source dev modle), then that's a better solution.

"If Twitter fails to find a revenue model and hits the deadpool, it will have
a chilling effect on innovation" - please. I believe I recall some innovation
in pre-Twitter era and I'm pretty sure there it will continue after it as
well.

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gwsaines
Twitter has a lot of options, but I'm not sure they need to reinvent the
revenue model for their system. I readily agree with MicahWedemeyer that
donation revenue models are best for smaller enterprises and aren't likely to
return on Twitter's VC investment dollars.

That said, what's wrong with unobtrusive adwords? Or dare I even suggest
location-based ads? I know several companies have tried the whole geo-location
social networking thing and failed, but perhaps Twitter has enough traction
that something like that would be relevant and productive for users.

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cookiecaper
I am astonished and sort of angry that there are actually people with these
kinds of assets who would think "just loan that company $20 million, we'll
figure out how to get it back later!" or even that a business would think
"let's just take $20 million, we'll figure out how to pay it back later!". I
guess I always thought that these places had to come up with _something_, some
kind of BS about how they'll have advertisers and merchandising and make
sufficient income off of that, or something similar. Apparently I was naive.

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arockwell
Its not like the investors don't know the risks. I'm sure twitter has plans
internally to make money and have presented them to investors.

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steveplace
No idea for the revenue, but I use stocktwits.com. They just got funding.

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MicahWedemeyer
Isn't stocktwits about the worst way to do investing research? Make your
decisions based on the fast-twitch advice from anonymous tweeters. Why not
just follow the hot stock tips that arrive in your inbox every day?

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steveplace
Taking trade advice from twitter is just like taking trade advice from CNBC.
Dumb.

But it is a good community. Not really based on hot stock tips, more like a
high-level financial community.

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wastedbrains
Take the ads that work in GMail and are sort of based on your conversations.
Apply to twitter streams... Done, seriously I am sure it would make a decent
amount of money.

If I am talking about a restaurant in Boulder and it shows me other places to
eat, I might even finally click an ad on the internet.

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Prrometheus
Charge by the twit.

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Kilimanjaro
Bill Gates, is that you?

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Prrometheus
I wish. Well, I would so wish if I could 25 year old Bill Gates.

