Peter Monroe’s last blog post..Peter Monroe

It may be more than that, but if it becomes a spam engine, only the 13-year-old girls will stay with it. But if I can pay $60-$100 per year to get a steady stream of trusted intelligence from people I self-select, with the benefit of being able to publish my best ideas/links/queries to N000s of self-selected followers, I won’t miss the girl-gossip at all.

–Ax

You can not assume that their only source of revenue is advertising. Just off the top of my head, I came up with over a half dozen revenue streams other then advertising (posted on my blog http://bit.ly/3V0jmP )

Andrew Finkle’s last blog post..How to monetize a Tweet (update)

One of Twitter’s many problems is that there are a lot of ways to monetize, but when you add them all up they’re still not a $20M company. They’d have to execute perfectly on a lot of different strategies to be a success. They need lightning to strike over and over again.

Where do you get your 100,000s of verticals estimate? If there were 100K verticals, then each vertical would have at most 38 people if they were evenly distributed across 3.8M users.

Most of the chatter on Twitter just can’t be monetized. It’s cool, but it’s not going to make much money.

And no matter what the pie in the sky options are, they’re going to run out of runway from their VCs before they can make it happen. Their chances of raising another round of venture capital without revenue in this market are minimal.

Don Draper’s last blog post..Why Twitter Will Be Sold in a Fire Sale

1) Twitter has (will have) a multitude of ways to monetize their service, NOT just advertising.

2) One can not get hung up on what Twitter is today, they will be an entirely different service a year from now (see an earlier post @ www.afpr.com which won me a Nokia Tablet from Jeremiah Owyang ).

3) When a platform becomes “location aware” its value (from an advertising standpoint) increases exponentially – It is not a matter of if this will happen with Twitter, it is a matter of when. This has already started, but is in its infancy. Twitter + FireEagle (LBS service enabler) = $$$$

4) In the Twittersphere there will be (already are) 100,000′s of vertical communities. The more vertical, the more targeted your advertising can be. The more targeted, the more valuable to an advertiser.

5) Open API’s = Ecosystem. Facebook gets it, Firefox gets it, etc. When you open up your software, you become the platform, the ecosystem. By being the ecosystem, your partners bring the users, bring the value. Having a mass of users has no small value, it is irreplaceable, and there are substantial “first mover advantages” to dominating ones space.

Andrew Finkle’s last blog post..Monetizing Twitter

Let’s be ultra generous and say Twitter can apply context advertising on 5% of their traffic. What’s the click through rate? 1% of that? Let’s be more generous and say 2%. How many tweets a day do they process? Again, being ultra generous we can say their 3.8M users tweet 10x day. No way it’s anything like that, but let’s blue sky this. How much revenue can they get from a click? A nickel? Again, let’s be generous and say they can get $0.25. 3.8M * 10 * 5% * 2% * 0.25 = $9,500/day or $3.4M/year. Peanuts. It’s not even going to cover the vigor on their VC money.

And let’s remember that we’re talking about twitter, the guys that can’t keep their systems up. Does anyone think they have the chops to put a natural language context filter on top of their firehose of tweets and put decent advertising into the mix? And how do they keep all those third party readers from just filtering out the ads? And keep in mind that their membership goes down, not up when they start trying to monetize.

Don Draper’s last blog post..Cross Pollinate Your Social Media Profiles

Andrew Finkle’s last blog post..Monetizing Twitter

Utah SEO’s last blog post..Mobile SEO – SMX Local Mobile 2008 Presentation

What I am proposing is a sponsored account — many, many of them — and a requirement for members to follow a few as part of using the service. How those sponsors choose to use their channel is up to them, with the consequences of misuse being missed opportunities with customers (too little activity) or an exodus of followers (too much, too inane activity). Aside from the fact that these accounts would (1) being paying money to Twitter, (2) be featured and required, they would operate under the same dynamics that currently exist.

Estimates put the number of created accounts about 2.5 million since Twitter launched in 2006, and a healthy growth rate is still evident. Just using my local Twitter community as a sample, I’d estimate about 60-70% are still active, with about 10% religiously so (a typical power law distribution). Perhaps the nature of this channel makes it less necessary to count heads and eyeballs than to strengthen relationships with evangelist consumers. Look at the extra love some of the A-list bloggers got in FriendFeed just by being included as featured members, and we might glimpse what this could mean for savvy Twitter sponsors.

There is already corporate use of Twitter that has proven highly effective, and some accounts “managed” by people who just don’t get it. These would still be available, but wouldn’t get the plug of being featured and part of the membership requirement for users. Twitter can charge a flat sponsorship fee, measured against their bottom line, and let the market and the capabilities of each company to connect to followers be what gives it value.

Kevin Makice’s last blog post..Phatic Power

Let’s assume Twitter can sell their tweets at $5/CPM (a very, very high estimate). If they can send 3 tweets/day to their 3.8M users, they get revenue of $20.8M/year. In other words, their best case is that their yearly revenue equals their VC investment. Adding customers doesn’t help because their limiting factor is users, which will trend down as they try to monetize. How many users are there actively using the service? And let’s face it, nobody is going to pay $5/CPM for 140 characters of advertising.

Their problem remains that the vast majority of power users receive their twitters via a third party tool. It won’t take very long before the tools figure out how to filter the commercial messages out. Change the CPM to $1 and it’s a $4.1M/year business. I doubt that will keep the doors open.

Don Draper’s last blog post..PMS Social Suite 1.1 Goes Live

One model I can see working very well for Twitter, its members, and its advertisers is Self-selected advertising. That is, make it a requirement to follow 2-3 (minimum) official sponsors in the same way and context you would any other friend or organization. Doing so allows you to participate in the free service; not following the minimum restricts access or features. This will work particularly well if Twitter can manage to recruit sponsors covering a wide range of product and service domains. Because of the self-selection, the message is much more likely to be heard, and the advertising behaviors more likely to be improved.

Kevin Makice’s last blog post..Phatic Power

Thanks for the thoughtful critique. Upon reflection, you have a point, my BW column’s wind-up was a bit long, but how often do you get Metcalfe cuffed by Dunbar?

The point I tried to make in the BW column is that social media gets a lot of marketers hyped up by the Metcalfe vision that human networks will skyrocket in value … when in reality, the numbers don’t hold up for those who will pay for these models. In today’s society, advertisers foot the bill, and advertisers are not seeing high returns from social media. There are many reasons for this, primarily that social media users are in a mode of creation and sharing, not receiving, so the old dynamics of letting cable TV wash over you as you sit there passively … and then see an ad … don’t work well among active SM users.

The real irony is services such as Twitter have *enormous* value for users, but much of that is at odds with the service making money. Twitter and Facebook and other online services have made communication seamless, uninterrupted and free. What makes people like me love these services is that we aren’t interrupted by ads — so their internal value among users would fall drastically if third-party advertisers start mucking up the place.

Information wants to be free. Business models have a hard time with that.

See you on Twitter

Ben Kunz’s last blog post..Tweeting the child within

Fifty Studio’s last blog post..I’m a Web Designer

I don’t know if I’d pay $10/month, though. I like Twitter, but there are plenty of things I like that I’m not willing to shell out $10/month for.

It’ll be interesting to see how it plays out.

A possible alternative would be two-tiered service: one level is free with no guarantees about up-time while a second is $10 per month with assurance of no spam and greater reliability.

I’m afraid, however, Twitter might not recognize a good revenue stream if they fell into one.

Ed Sutherland’s last blog post..Twitter: Destined To Be Google’s Hood Ornament?