You Can’t Charge For Twitter Popularity

 

There are a number of fundamental flaws in many of the “calculations” being floated as a business model for Twitter.

I am just going to revert to bullets to make this easier to digest.

  • Slapping a charge on your biggest fans is financial suicide – if someone has been evangelising your product for 2 years, and using their influence to build your business, it would be extremely foolish to damage that relationship.
  • Om Malik is touting bandwidth costs possibly up to 30GB from Robert Scoble – hosting companies… even free blog hosts such as WordPress.com give that kind of bandwidth away these days.
  • People choose to follow you, and you have no control of who they are – with something like email marketing you always have an option to prune your list if the costs are not bringing a return – not so with Twitter
  • Even if Twitter levied $0.01 per person followed per month, with the first 50 free, they still would have problems coping with highly followed users such as Robert Scoble, Leo Laporte and Jason Calacanis – it would have to be how many you followed, not how many follow you
  • With Email marketing, one of the biggest problems is how fast you have to deliver messages – delivering to a mailing list of 100 within an hour is no problem even for a shared host, but to deliver to a mailing list of 500,000, within an hour is a major scaling task. With Twitter, people want their messages within minutes or seconds…
  • Twitter as it stands isn’t really suitable for the business use it seems most of the heavy users are using it for. Whilst you could argue it is opt-in, there is no method of clear disclosure – if an email marketer was blasting out commercial messages to an opt-in list without commercial disclosure and his full contact details, he is asking for a legal nightmare.
  • Only a small fraction of messages sent ever reach all potential destinations
  • Twitter doesn’t provide statistics of delivery rates – I have over 1500 followers, but if I tweet a post a couple of times it is unlikely I will see more than 20 or 30 visitors in my stats – I could improve tracking, use tracking URLs which block bots etc to get a real number, but it would need to be intrinsic to the service to be of value.

As you would expect, Robert has plenty of discussion – I don’t think it is quite the IO Hell that Dare Obasanjo suggests – as an example I only switch on Twhirl for 1 or 2 hours per day.

You don’t see people moaning on Techmeme about Skype, when you suddenly get a batch of messages from 2 days earlier that were posted to a group.

Friendfeed has the benefit of hindsight, the demand and problems Twitter faces were apparent before FriendFeed was conceived, and Friendfeed really meets a different purpose.

Just remember one of the other pet topics on Techmeme, slow delivery of email messages with Gmail, or slow Google Reader updates, even with resources far beyond the reach of a startup.

As for a viable business model… Twitter have my email address, they should use it, possibly to promote other startups for a small amount of cash or equity. I can easily stand a Twitter email once a week with updates on new features, other Twitter news, and a mention of a few 3rd party services.

 

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Comments

  1. says

    I wouldn’t mind if I was required to follow “Twitter” for example and received a tweet from them daily with a “recommended” item to buy

  2. says

    pay for push makes sense, but there are a lot of people on twitter that sign up hoping you will follow back – I have seen people that follow 30 thousand others. I can’t see paying for people like that, even less value than stumbleupon traffic!

  3. says

    Come on guys, you are not getting the Twitter business model. Anyone buying Twitter Inc. gets to have all these users.

    So who ever gets it will build other applications around it! Everybody is hooked on Twitter, because of the Power users using the service!

    Hey Twitter can turn around and Ask Face Book, Friend Feed and other social networks that use its API connectivity for usage fee!

    It is like you guys could not imagine how Google would make money when it first started, well Adsense! Now Google buying up properties just to retain its users!

    Can someone tell me how Youtube is making money? Gmail, GDocs, etc.

    There are complementary services to Google search engine which makes revenue from Adsense.

    Please think out of the Box.

    • says

      Completely agree with you Igor. Twitter might not be making any money or satisfy people as Andy suggest, but there is so much more to Twitter if you dig just a little deeper. What a great platform for instant communication, discussions and interactively. Everything web 2.0 is about!

      Thanks for sharing.

      Nick :-)

    • says

      Sorry, I totally forgot! Twitter can share in revenue stream with mobile network providers. I would not be surprised if they already doing this.

      When you use SMS to send a Twitt to Twitter you have to pay for that. If you use a mobile browser platform to post a message you are using up your data packets.

      With so many people using Twitter on their mobile phone it is in the best interest of Twitter to have more and more users.

      I did some consulting for a Mobile Telecoms company in Asia, so that was their business model with application providers.

      Download a ringtone for free but using up your data allowance. The ringtone provider shared in the stream of revenue.

  4. says

    Pretty comprehensive list of arguments here, Andy. And I do not think I would want Twitter to implement any monetization strategy based on heavy users and the number of people they follow. The only trend I notice myself is that the majority of heavy users also rely on some desktop client to use Twitter more efficiently (of course, it is a nightmare to try using Twitter without it when you follow hundreds of people and actually want to engage in discussions with them) and a better idea would be to charge users for access to Twitter via API through some third-party application. Otherwise I would not want them to charge me based on the people I want to listen to. But I would not mind them charging me for extra comfort.

  5. says

    I agree with you, Andy. It’s just counter-intuitive to penalize the very people who form the base of Twitter’s popularity. I think Igor’s ideas are superb as far as creating a revenue model for Twitter. Ads, collaboration with the telecoms, working with the social networks, and using Twitter as a platform to launch businesses. As a user, like you I wouldn’t mind receiving a marketing email from Twitter, nor like Igor, having to follow a TWITTER account and get their updates. I’d probably drastically reduce the people I follow to a bare few, if I’d be made to pay for each one. And I imagine everyone would too, destroying Twitter’s phenomenal reach.

  6. says

    I only Follow people that have something interesting to say about what I am involved in!

    I cannot imagine how @Scobleizer follows 21k! Does he read what they have o say? Or he just talks to everyone from the top down and wants them to do as he says? He himself admitted in a Tweet that people want to be told what to do. I disagree with that people want to participate in the process of building creative ideas!

    We are a community of Internet users with common goals. So, we all have a voice that is counted towards consensus.

    Maybe @Scobleizer is Mussolini and he is a Totalitarian Dictator! When Sobleizer speaks, everybody listens or they get Blocked and even Banned on Twitter! LOL

    There is nothing wrong with a large following as long as you let your followers contribute as well.

    Like Andy, Maki, Darren they all let their followers say things and even be controversial at times.

    I think what makes a strong leader is a strong base of followers not Yes Sir, Thank You Sir!

    Ha,ha! A bit off topic.

  7. says

    I follow people for leads on local news as well as people who have good industry knowledge (like you Andy). Much of the A-listers post such crap that its hard to follow them.

  8. says

    Twitter is new to me. I have been on a while, and have around 100 followers, following twice that many. i enjoy it. Is it a sevice I would pay for? Perhaps a small amount, but not much.

    One thing I can see twitter starting to charge for would be a ‘premium’ account that would take off the ‘dofollow’ tags. therefore your more or less buying backlinks. whether that is what you want or not, that is up to you.

    i do agree with doing the follow for a twitter id, or charging some people (ie woot.com) a subscription fee for advertising their deals to everyone. it would have to be a mass broadcast to work in my opinion.