Much talk about Twitter and business plans, considering I had an email exchange with a good friend on this very topic I thought I’d throw it out for public discussion.
I am skeptical of this because it puts a bullseye on them for user pushback. Plus, as social networks teach us, advertising on these mediums moves quickly to commodity pricing that is complicated to scale, even with Twitter volumes. Personally I think Twitter should say away from advertising… users don’t benefit from it and brands will find little value in it.
This is where freemium comes into play… free Twitter for everyone, premium twitter for companies, additional services, and a subset of third party app developers. Another fairly obvious premium service is multi-user accounts, which is targeted squarely at companies using Twitter for brand activities.
Additional services that would be worth paying for include analytics, such as trending and tweet volume, reach analysis, link analysis, and profile based services.
The notion of real time services (high performance feeds) strikes me as an opportunity as well. Plenty of information services rely on inbound data that is high performance in nature and backed up by an SLA, while it’s probably a stretch for Twitter to do this today considering the well earned fail whale reputation, it’s a goal worth setting.
There are opportunities for applications built on top of Twitter, like market research, but I would stay away from this in order for the developer ecosystem to mature. I doubt that Twitter could juggle multiple strategies at the same time, most companies can’t, so it’s imperative to focus on building out the platform business rather than the application business.
I like the idea of offer a portfolio of rich services for media entities. Instead of CNN buying CNNbrk they pay Twitter an annual subscription to CNN branded services that they effectively resell through their CNN.com sites. Given the state of the broader advertising marketplace, it may seem like a stretch to build a business unit around this but media entities will pay and even today still have the ability to pay for services that drive audience.
Twitter controls a namespace and one of the persistent problems for users and Twitter alike has been discovery of other users. It’s a problem for users because the best stuff to follow is often in the realm of not knowing what you don’t know; in other words it is a classic discovery problem. For Twitter this discovery problem reveals itself in the user retention problem that has been well documented.
If there is one place where advertising makes sense it would be in a directory of profiles organized by metadata (keywords) or categories that are defined by users themselves.