“News: Popular social networking novelty Twitter is to try to earn some revenue by aiming at businesses with expanded feature set that costs.” That’s essentially the news today about Twitter, squeezed into a 140-character Tweet–the messages that are the service’s lifeblood.
There’s been a bit of rumbling in the news recently about “paid pro accounts” on the service, that have now turned out to be true. Biz Stone, the company’s co-founder, made this remark to Reuters about his company’s upcoming plans: “We think there will be opportunities to provide services to commercial entities that help them get even more value out of Twitter. If these services are valuable to companies, we think they may want to pay for them.” The core functions of Twitter are going to remain free for individuals and companies, while the expanded service offerings are simply “add ons”, and that’s what will be charged for. To that end, the company has hired someone to craft its commercial offerings, which should be seen sometime this year.
It seems, Twitter simply waited until its popularity penetrated the mainstream to clarify its business model. Until now the company has earned no revenue from its thriving social networking application–or should I say “social networking phenomenon” since you can tweet from your PC, smartphone, ordinary cellphone, and even your plants can Tweet when they’re thirsty. Twitters rise to fame has been astronomic, but its business model has bucked the trend of many Internet startups, since the site hasn’t carried advertising (until very recently) or charged its huge user-base for its services.
Its owners are even reported to have turned down a $500 million buy-out offer from Facebook last year. Instead capital’s been raised through venture capital, with an early round garnering $20 million and recent efforts capturing $35 million.
Yet, “pro” offerings aren’t the only way Twitter could potentially earn cash. Microsoft and Federated Media, an online marketing firm, have recently launched ExecTweets–a service that collates the Tweets of business executives, creating a kind of de facto fast business news service, and educational resource. Meanwhile Salesforce is trying out a new client relationship management system that uses Twitter as a communications medium. It’s adding Twitter connectivity to its Service Cloud CRM for operatives to communicate with customers–it’s essentially a “channel” to direct specific customer-related tweets through, and the company sees it as a way of speeding up client interactions, and thus a good addition to the system. Both of these models represent novel uses of Twitter that could echo how the company might expand its own operations with new “layers” on top of the basic messaging service.
Exactly which commercial enhancements Twitter will choose isn’t yet clear. It’s easy to speculate that the 140 character limit on Tweets may go up, or there’ll be an improved version of the new “live search” facility. But that’s just speculation, and Twitter is apparently going to try a bunch of methods to monetize its service. The mystery is very fitting for a company that rose to fame mysteriously and totally unpredicted by the industry, with even Google’s boss making a recent sour grapes-sounding reference to it as “poor man’s email”.
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