How can Twitter make money?
Mar.29.2009 
With celebrity endorsements and the traditional media raving about it, in the past 6 months Twitter has exploded on to the main stream. So much so that according to compete.com, with nearly 55m visits a month, Twitter is now the 3rd most visited social network in the world.
However, they don’t actually make any money from the business! And this is starting to lead to questions about whether the site’s success is worth the financial investment if there is no return. One theory is the business exists simply to be bought by the likes on Google or Microsoft who can afford to run services such as these at a loss with the data they gather worth the outlay.
However, if I was the owner and wanted to start rolling around on a bed of crisp £50 notes I would look at the following…
Advertising:
Contextual advertising
Here I would pick out keywords and phrases being used by members in their (and their friend’s) tweets and then display adverts associated with those themes. For example if you are discussing the latest Nike trainers, a sports retailer magically appears with a great offer on trainers.
These targeted adverts could either sit within the feed so they are integrated with other tweets (although clearly marked as an advert) or as display advertising on the profile page. Google uses this method on Gmail to display their adverts.
Self service PPC network
In exactly the same vain as the search engine’s pay per click auction model advertisers would bid on keywords and phrases to have their adverts shown and only pay if someone follows the link.
Charge for the service:
Volume tweets
The commercial email platform’s charge customers based on the number of emails sent out per month. Twitter should do exactly the same through monthly credits for businesses.
Two tier membership
Don’t want to be shown my adverts? Then pay me! A lot of services now offer a two tier model, with free users being shown adverts and those who want to avoid them (along with access to some snazzy features the free users don’t get) paying an annual subscription fee.
Monetise the data:
Charge big business for access to data
The sheer volume of information passing through Twitter everyday will be enormous. Providing companies and agencies with data about what is being talked about could be a gold mine.
Jerry’s final thought
Obviously the counter argument to all this is all these adverts will put people off using the service, but unless they started putting adverts everywhere I don’t believe this would be the case. I currently use ‘Twitterific’ on my iPhone and they have monetised the application by showing me a graphical advert every 20 tweets or so. They have been thought out and are not obtrusive so I’ll put up with them if it means a free service.
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Forum:
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