Twitter: here is a business model for you

If I doubted Twitter before and became a recent convert, … well this week I became a Twitter lover.

What did it for me?

It was watching the tweets come across the ticker in real time on Tuesday while Google were announcing their new features at the emetrics conference in D.C., some 2,500 miles away from me.

It was like being there in person. Thanks to tweets, e.g. by @June_Li. What a great use of Twitter.

But Twitter has a problem:

It hasn’t found a business model.

And, famously, Twitter users also have a problem:

The vast majority of tweets are boring and a nuisance. And some tweeters tweet more often than they have interesting things to share.  It’s a new form of spam! There should really be a frequency crap. [Note on Oct 26th: oh oh, freudian slip, as Mike Keyes caught. That was meant to read “cap”]

Twitter could do everybody and themselves a big favor and solve both problems with a single strike.

I’d propose they should charge an increasing price for each tweet per person per day, e.g. as follows:

  • Your first tweet per day is free
  • 2nd tweet per day, you pay 50 cents
  • 3d, you pay $1
  • 4th, you pay $2
  • 5th, you pay $4
  • 6th, you pay $8

Surely, if something is worth saying to your followers you will spend a buck to do so. And if it isn’t worth a buck even to you, then, by all means, shut up.

Meanwhile, Twitter would leave it completely free to follow as many tweets as you like.

Twitter could forecast how much revenue they can expect from a move like this. Since they aren’t doing this, I presume they will have thought it through and probably concluded that there is a problem with this idea. The numbers might not add up to justify their current $1B valuation maybe.

8 Comments on “Twitter: here is a business model for you

  1. I see Twitter as still in its relative infancy and much like its sibling, “traditional” blogs, there will always be noise as well as honest-to-goodness content. While there will be folks that blog about nothing of consequence, there will be those who blog and will have a major impact on society. I can foresee the same with Twitter. I think the quickest way to kill the popularity and usefulness (yes, usefulness) of Twitter will be stifle the Tweets by imposing too many fees. Perhaps another business model that may be as effective would be for tiered accounts or tiers of functionality. Corporations who primarily use Twitter to disseminate information for Marketing or Customer Service would pay for an expanded account, while individuals, journalists, etc. would be able to choose to have more robust accounts, while many would still have free accounts as they do today. I whole heartedly agree that Twitter ought to develop a plan to become self sufficient and profitable, but I hope not at the sake of what has made it such a popular tool to date.

  2. Nice Post. There is another problem with Twitter for marketers. Direct marketers have tried for the past 50 years to personalize offers to make them more relevant to the consumer. Twitter is essentially mass marketing to a selected audience. We at Conversen are trying to make Twitter more personal through integration with other channels using data from systems like Unica or CRMs.

  3. Hi All, very good points. Thank you for sharing.

    David has a good point that must be on Twitter’s mind, namely whether now is the right time to put a tax on tweets vs. growing their usage further. And your business model seems a fair possibility too. Sounds similar to Craigslist. Though the latter have it easier because they have clear categories (i.e. real estate and jobs) where companies pay. How to distinguish a company from an individual employee will be tough on Twitter.

    Gerard has a fine idea too. Could Twitter do what Facebook is trying, i.e. to provide a targeted audience to paying companies? For example, users could choose between Twitter free vs. Twitter ad free. The former might show you a targeted ad tweet by a paying company, let’s say as 1 of every 5 or 10 tweets that you see.

    Mike, oh oh, what a freudian slip. I had no idea what you meant until I found out by accident. Ouch! 😎

  4. I agree that too many people tweet too much. And I’m too lazy to explore the third-party tools that might let me filter the tweets I see. I like the frequency cap idea. I wonder, though, if it would tilt the twitter too much toward marketing, because advertisers might be more willing to pay for frequent tweets than others.

  5. Hi Susan, Already today it seems that many frequent tweeters seem to be consultants or vendors who are on a mission to increae their own name/brand awareness. So, I agree with you that one wouldn’t want to tilt that balance any further towards marketers.

    Come to think of it, I began the post by sharing my excitement about Twitter during last week’s announcements by a vendor. Well the people sharing the excitement did so tweet by tweet as the presentation was rolling along. They must have done 5 to 10 tweets during the 30 min presentation which was precisely very exciting. Yet, with my business model that might not have happened.

    Maybe a better way would be to give a budget of 30 tweets per month and individuals can choose to tweet them all away in a day or across the month.

  6. Now that search engines are going to include tweets in search results, we may end just finding relevant tweets via search, just as I tend to do now with blogs. I almost never look at my feeds, I just wait until I want to read about one thing and then find that one thing.

    It’s kind of anti the real-time spirit, but …

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