Twitter Wants to Make Money

How do you take a good, free service with a large and growing user-base and make money off of it? There are two obvious routes.

  1. Take away the “free” aspect and start charging users or go halfway and create paid premium accounts which have more privileges than normal accounts.
  2. Keep it free, but compromise the aesthetic with advertising.

Well Twitter, everyone’s favorite micro-blogging service, is looking to finally gain a revenue stream.

Biz Stone

Biz Stone, co-founder of the company, said in a May 2009 blog post that while Twitter is not philosophically opposed to the idea of advertising, “[…]the idea of taking money to run traditional banner ads on has always been low on our list of interesting ways to generate revenue.” Stone has repeatedly stated that he’d like to foster Twitter’s ability to bring businesses and consumers closer together, implying that he sees Twitter as a tool with potential to be more than just a venue for the chattering of the masses. Stone has said that “the service’s value should be judged, not by its traffic – which grew 131% in March to 9.3 million visitors – but as a tool to ‘facilitate connections between businesses and individuals.'” If Twitter succeeds in that goal, it may achieve lasting commercial value, and become more than just social media. So how can they achieve this? The people at Twitter have a few ideas:

  1. Premium Accounts, or more accurately, “commercial accounts.” Twitter is considering making paid accounts which would appeal specifically to businesses trying to reach consumers through Twitter. The accounts would offer the advantage of sophisticated analytics to assess how well a company is Twittering.
  2. APIs, once again being more  commonly referred to as “commercial APIs”. The idea is to create”business-oriented application programming interfaces (APIs), creating a ‘commercial layer’ over the social network.” Presumably these would serve as more obvious means for businesses to sell through Twitter to consumers, rather than just talking up their new products on the service. An example might be an online store API which sits right in Twitter. Twitter is also talking about coming out with an API which allows latitude and longitude to be tied to any tweet. You could then conceivably filter tweets by location, allowing you to find out who’s at that concert with you, or who’s tweeting from the earthquake in China. Not exactly as useful a service for commercial applications, but still a good example of how the effective functionality of Twitter could potentially increase in the near future.
  3. Certified Accounts, which presumably are tied in with premium accounts, are different as far as their specific purpose. A “certified account” would be an account to which Twitter gives its seal of verification, so that everyone knows they’re hearing from “the real Shaq” and not an imposter who’s looking to mislead a slew of basketball/Kazaam fans. Twitter has done this for a few celebrities already, and you can see how a “certificate of genuineness” would be appealing for brands trying to Twitter. Not only would it instill trust with consumers, it will probably also give certified users priority status when searching for related users or services. One drawback is that normal, public users might see it as a mark of a corporate account which is only trying to push their products, and immediately avoid such certified users. Still, I don’t think Shaq has to worry about losing his own unique brand of genuine Shaqness.

These are just a few ideas for how Twitter can start to make money. Regardless, Twitter has raised $55 million since the company started 2 years ago and made it past 44.5 million unique users in June, according to ComScore. In light of that information, Stone has asserted that Twitter has plenty of cash and is in no rush to develop a business model. As to whether or not you’ll ever find yourself paying for your personal Twitter account, Stone is quick to reassure users, “Twitter will still be free for everybody and we’ll still tell them to go crazy with it, but we’ve identified a selection of things that businesses say are helping to make them more profit.” So maybe all you free users can help Twitter make some money…by spending it on businesses that are using Twitter.


premium accounts

commercial accounts/APIs

Twitter staying ad-free

long/lat API

Stone’s advertising blogpost

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