Twitter To Finally Find A Business Model?

Twitter logoIs Twitter close to finally introducing something resembling a business model?

The blogosphere is buzzing today with talk of Twitter adding ads to its posts.

Rumour has it that Twitter will be introducing ads into peoples’ Twitter streams. This would mean that after every 10, or 20, or however many posts, users would see an ad in their Twitter stream. Regular users would have noticed a fair bit of downtime last night. Some people reported seeing ads in their Twitter stream during those outages.

This approach makes sense.

Many Twitter users don’t use the Twitter website itself. Instead, they use third-party applications like Twhirl, Twitterrific, GTalk or Twiku to post their messages. On-site ads would miss these users, but by including ads in the flow of Twitter posts, the company captures a much larger audience.

While the majority of people seem ok with the idea, some people are vehemently opposed, say they’ll quit the site if this happens.

Me? I’m just surprised it took this long. Despite the last round of funding bringing in $5.7m in July 2007, Twitter hasn’t raised a dime in revenue so far.

Twitter needs a business model. With what must be huge server, bandwidth and development costs, it can’t go on providing a free, non-commercial service. Either they introduce a more feature-rich service that people would pay for (and undermine one of Twitter’s biggest attractions – simplicity) or they turn to ads.

The obvious solution, and one that people seem to have figured out, is to include ads but provide an option to turn ads off. This would likely take the form of a (paid) premium service. If it’s affordable, I think hardcore users are likely to take advantage of something like this, while more casual, occasional users would probably deal with the ads.

Do you think this is the right way for Twitter to go?

Update: Oops. This then, again, raises the question: When the hell will they start raising revenue, and how?

  • Twitter had to get enough eyeballs to make advertising possible and worthwhile for the advertiser, and that has now happened as I have heard it has 1m users. Myself, I’d rather pay a small monthly fee NOT to see ads, but I will live with ads rather than give up Twitter. I mean, get real — nothing is free forever 🙂

  • The pro version of Twitter should not only hide ads, but add functionality such as more sent SMS messages and better uptime. I’ve been clamoring for a paid version of Twitter for a while – http://is.gd/4Yc – and I’m glad it looks like something is now in the works.

  • Icon Factory, the people who gave me free use of Twitterrific all these months, have been tweeting me advertising the whole time. I wonder if that load suddenly doubles, whether I’ll shell out the $ to lessen it. Either way, oddly, I’m glad there’ll soon be a monetary value in Twitter dealing with scaling and surge-protection. I want the service there at the same time many others do. A low complaint rate to Twitterrific ads is encouraging news.

  • I’m a casual user of twitter now that I’m at a company that heavily watches what you surf/connect to, so I think that if there was a pro model (which is the avenue that seems to make the most sense) I would likely try out the “free” one for a while and eventually dump it. It’s sad, but it’s true.

    Or I can just go get a job that doesn’t have Big Brother so I can go back to using it more. 😉

  • Kim

    I’m another casual Twitterer; I won’t pay to have the ads go away. And if the ads got to be annoying I just would not Twitter any more. It’s more of a fun app for me, although I have been learning alot more about social media through people I have linked to-went outside my normal box.

  • Mark R

    Can I also pay to get rid of those annoying “tips”? Hey Twitter, stick with your simple application and just make it work perfect.

    I receive Twitters in text message format, here’s one of my favorite recent tips that came posted with a friend’s Twitter: “Tip: Sometimes Twitter will post tips here”. Come on! You guys are smart and you have a smart app, don’t let shit like this happen.

  • As a new Twitter user I have been trying to explain it to some of my friends of late. Most seem to assume that it is advertising driven anyhow. Streamed ads might slow the uptake by new users, but if appropriate and tasteful I can see the value. I don’t use the service enough to register for a paid version, but I could easily understand why someone would.

  • Ad in my Tweets is the reason why I don’t use Pownce.