Posted March 26, 2010 9:35 am by with 3 comments

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Remember when Twitter caused a stir among the development community, when it suggested you may never want to use a third-party app again?

Well, co-founder went CNBC and appeared to reveal just a little information about Twitter’s monetization model. When asked if Twitter was receiving a cut of the ads shown by third-party Twitter apps, Biz said “no” then went on to say:

We’re going to roll out something we think appropriate not just for Twitter users but also for the ecosystem when we develop this monetization platform, it’s not going to be just for us, it’s going to extend to all these apps that are out there that everyone is using.

Now, Silicon Alley Insider took this to mean that Twitter would create a model devoid of those annoying ads that are inserted into your tweet stream, but I’m not so sure.

First, I don’t see anything in that statement that suggests these ads are going to go away anytime soon. In fact, I can’t think of anything Twitter can do except insert ads into the stream. OK, so maybe not in the same format we currently see on desktop and mobile apps, but similar. Twitter needs a way to make money and web users have shown time-and-time again that they simply don’t like to pay for stuff. That really only leaves ads as an option.

They may be more creative ads than we see now, but I suspect we’ll still see advertising as part of Twitter’s new business model. I guess we will have to wait until the end of the month–which is when Biz says all will be revealed!

  • I’m not so sure that Twitter’s only option is ads. If they charged a person for a Twitter subscription, say a $1 a month, I don’t think many of us using the service now would cease and desist, would we? Notice my uncertainty about it all, does anyone else think they would “be allowed” to do this by us?
    .-= Eric Goldman´s last blog ..B2B Print Publishing: Looking for a Lifeboat =-.

    • Sounds like a previous attempt to charge for email, that failed. Even if successful, I’m not sure Twitter wants the headache of customer service/billing for millions of users, just to collect a dollar per month. 😉

  • There is a similar dilemma for Facebook with the notion of charging. There are just too many alternatives. I only use facebook as all my friends are there. I would not pay for it. I have asmallworld, linkedin, gravity, lavapeople etc for a variety of uses. Make me pay and i’ll go elsewhere. I imagine the same for twitter. Furthermore, be too ardent with ads and you will denigrate the user experience. The quality goes down and you just fall out of love and meet some other lovely lass. “It’s not you it’s me.”

    I read an interesting article recently that the only viable online strategies for many online only businesses are nefarious. Read: yelpesque scams (Alledgedly- see how the 3 action suits go. Though reading an interview with Stoppelman in the NYT he is not worried…) and zynga, scamville etc. (Seen the video from the mixer!)

    I agree with you Eric, ads per se are not the only option. There are smart ways of doing things. Syndication of services is one such example. By segregating services to those less px elastic or those that can monetise existing content there may be long term sources of income. Ultimately I see the syndicatees as making their consequent revenue from ads. Papers still haven’t found an alternative to ads and they have been around for a very long time!

    Andy, good point. Look at google, their strategy is to increasingly use agents. In fact they have a long term agreement with a company whose name i forget to manage all the billing (related to requirement for banks in each country) with agents. Micro billing with millions of users, apart from being a headache may not be economically feasible, well certainly if there was a paypal sized charge. 1 buck a month will be like a US restaurant menu- excludes every other imaginable charge such as tax and service!