Twitter has famously decided to create a giant user base before even coming up with a business model. This is a hazardous plan, and one that’s earned them a lot of mockery. But one advantage to growing a platform, with an open API, first and retrofitting a business model later is the opportunity to observe how users use and hack the system themselves. Twitter has paid attention to how users use the system, such as using @ signs for replies and hashtags for topic tagging and implemented them into the system.
Additionally, hundreds of Twitter clients and applications have been built. Companies like Microsoft, Adobe, and Apple have long looked to 3rd party developers for innovation. There’s quite an opportunity to steal implement some of the ideas already in use and build revenue streams from them.
I’ll start off with a couple of obvious ones that have been discussed, and move into less obvious, and in my opinion, more lucrative ideas.
Ads on search pages
This is something Twitter’s talked about doing before. Twitter is rightly cautious about serving ads on their pages, but they could probably get away with selling PPC ads on search results pages. They could build their own platform, or use someone else’s. If I were Chitika or Yahoo!, I’d be courting Twitter for this contract right now.
Premium services for business users
This is has been specifically mentioned by Evan Williams before. So here’s a”sub top five” of specific services they could offer.
1. Validated account names to prevent public embarrassment. Also, mirror accounts for variants on a name (ie, @exxon, @exxonmobil, @exxonsucks, @exxonrules, @XOM, etc.)
2. Cross posting – Allow users to post the same tweet across multiple accounts (ie, post to both @sergeybrin and @google at the same time). This can be done now with various clients.
3. Autofollow users who follow you. This can be done with bots, but it’s just one of those things that would be nice to have included in a premium package. This should be done across accounts as well (such as the @sergeybrin and @google example noted above).
4. Filtering. Let business users, who will be following thousands of people, trim their lists to read only who they want. This can be done with TweetDeck now but LiveJournal style filterting is sorely needed. (Really, this feature should just be added for free for everyone.)
5. Geo-locative services – Yes, the idea of sending a coupon to someone’s mobile as they pass a store is now cliche. That doesn’t mean that there isn’t money to be made doing it. Twitter should add some geo-locative features for GPS users eventually, and it would only make sense for them to allow opt-in location based promotions.
Premium services for users
This is my least favorite idea, mostly because I think it’s hard to convince consumers to pay for web services, especially when they can get these services for free. That said, there are some opportunities.
1. Charge for text message delivery. One of Twitter’s biggest costs is sending tweets out as text messages. There’s an opportunity to change this expense into a revenue stream.
2. Limit number of tweets per day, and charge for anything over. This will probably sound horrible to most Twitterers, but it could work out. Craig’s List charges for certain types of ads. This has the dual effect of creating a revenue stream while preventing abuse of the ad system. Metafilter charges $5 for a lifetime membership to keep out the riff-raff. So charging people a small fee before they can flood your Twitter feed with up to the second details about their laundry washing might actually benefit everyone.
3. Filters and protected tweets. Same as the possible package for business users. But again, I definitely think this should be free. Currently, Twitter only gives you the option of having all tweets hidden except to people you follow, or having all tweets visible to everyone. I’d like LJ-esque granularity here.
Professional services: license the technology to companies and government agencies
Twitter could build custom microblogging applications for businesses, and perhaps more lucratively, government agencies. Twitter’s use for emergency coordination and disaster relief is much touted – they should capitalize on this. They can offer secure microblogging services behind the firewall, custom tailored to an organizations needs. Competition: Laconica, an open source Twitter clone that powers identi.ca.
Digital payment system
This is my favorite: compete head-on with PayPal. There are a few PayPal competitors out there (ePassporte, Revolution Money Exchange, Google Checkout), but Twitter seems like the perfect platform for a payment system. There’s already a third party solution trying to do this: TwitPay. I’m not ready to hand my bank account info over to TwitPay, but I would to Twitter. If Twitter can make it easier to transfer money amongst users, and take a little off the top, this could be their killer revenue stream.
Crazy idea: Twitter could become a virtual free bank, offering their own digital currency that can be traded through Twitter. Give a certain amount of starting credits to verified users, and let the market determine the actual value. Hey, maybe if they limit the number of tweets per day they could make “tweet credits” tradable – a la cell phone minutes in Africa.
Related: Four other Big Brothers
(BTW, you can follow me on Twitter at: @klintron)
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