Twitter: The Best Business Model EVER?

Posted by Dave Wiltshire on September, 25th 2009

Is Twitter a paper tiger?  Sure, it’s wildly popular, fast-growing, and set to secure $100 million in funding, which is a neat trick for a company that has no business model and generates virtually no revenue.  Apparently a lot of people are willing to bet that Twitter is going to become even bigger.  Descriptions like “next big thing”, “unlimited potential”, “poor man’s email service” are bandied about as evidence that Twitter can’t fail.

Some business owners live by the adage to “be wherever your customers are”, ergo, if they are on Twitter, so should your company be.  It’s easy to see how Twitter could help certain types of businesses, e.g. real estate agencies, reach customers and potential customers at a moment’s notice.  Some companies either have or are planning to have a Twitter “Czar” to interact with customers, making sure that the company is never far from their minds, sending them little messages, sales alerts, newsy bits, etc.

There are lots of websites that have instructions on how to use Twitter to market products and services, and there are sites that claim they can develop a Twitter ad campaign for your company and grow your Twitter following, for a price, of course.  Large companies (Dell, Whole Foods, and Jet Blue) are generating revenue by twittering to their customers, but none are enthusiastic about paying Twitter for its services.  Some companies claim to have figured out the optimum days of the week (Tuesday) and times of day (early morning, lunchtime) for reaching the maximum number of Twitterers (or is it Tweeters?).  So SOMEBODY is making money on Twitter, just not…Twitter.
But can Twitter monetize its site?  Some pundits believe that the only way Twitter is going to be able to generate revenue is by selling advertising on its web design.  But, as Biz Stone, Twitter founder, muses “How would they [customers] respond to us putting ads on the site?  Are we going to end up pissing them off?”  Mr. Stone does not seem to be worried about details like business models or income, saying that right now Twitter has plenty of money in the bank.

But does Twitter have an ace up its sleeve?  Could it be that Twitter’s business model is to make itself the product?  Are the folks at Twitter putting lipstick on her, dressing her up, and sticking her in the window with a big “For Sale” sign?  Google, Facebook, and Yahoo have recently expressed interest in acquiring the company, which no doubt has the effect of making it even more attractive to investors.  And they, in turn, pump more funding into Twitter, which makes it more appealing to potential buyers.  Wow, come to think of it, this may be the greatest business model ever.

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