Microblogging giant Twitter has seen a massive surge in popularity lately, in part due to the Ashton Kutcher vs. Larry King and CNN compete to be the first to have a million users, in part because Oprah, the queen of everything, made her debut, and in part because more and more people are realizing that Twitter is amazing and fun. They are also realizing that, yes, they do care what you had for breakfast while on vacation in Omaha. Under all these media microscopes, the elephant in the room is impossible to miss: how does he follow Twitter and get as good at making money as it is at small but interesting conversations?
Looking back at the beginning of Twitter, it was a tool popularized by the edgy and modern folks at South by Southwest. Following in the footsteps of those who preceded it (MySpace, Facebook, and all), it was a while before companies joined the hipsters trying to sell them. Suddenly, in the last year or two, Twitter has become Interwebs’ favorite golden son, replacing Facebook, which replaced MySpace (and thus MySpace begat Virb, and Virb begat Friendster, and I begat an aspirin and a bed).
The question now is, does Twitter really have a chance to take advantage of all this success and all these millions of users and turn them into what every business really needs: profit? Conventional wisdom says that when it comes to monetizing a large number of users on a website, you have two options: charge people to use the service, or place a ton of ads on the site. Both of these strategies scare the hell out of me when it comes to Twitter, and either could spell the beginning of the end for site relevance if done wrong.
Consider paying to use. There is no way Twitter can charge regular users without completely decimating its user base, particularly when fifty new “free Twitter” services would be ready, packed with venture capital funds, ready to aggressively steal all private Tweeples. rights of Twitter. Celebrities would also blow up the chicken coop (more bird references, har har); Top Twitter celebrities are arguably more valuable to Twitter than Twitter to them, so why would they pay for the privilege of lending their name, credibility and fame to a service that is charging them?
The idea of companies paying to use Twitter has been discussed before. This, in my opinion, is the best possible way to bring pay-per-play to Twittersphere. Businesses small and large have started to make incredible use of Twitter – look at the success of Zappos, Mimobot, and JetBlue (two big ones, one smaller company, all making creative and successful use of Twitter). Given the astronomical growth and influence of Twitter, would these and other companies be willing to pay a monthly fee to access this large trendsetting audience? Absolutely.
The other method of monetization, almost as old as graphical web browsers, is online advertising. Sure, it makes sense to those of us who make a living running ads online – why wouldn’t we want a group of 30, 50, or that many million users to advertise? But again, the pressing question is how it is done. Some say (and I, for my part, agree) that the demise of MySpace as a network worth taking seriously may be directly related to its transformation from a legitimate social network to a massive conglomeration of advertisements with your name and date of birth in the middle. Facebook has also seriously tarnished its reputation with its attempts to show ads to its users; just look at the stories from late 2007 and the revolt against their attempts at “social advertising.”
It’s really sad to see both sites in such a mess simply because they really wanted to make money from their businesses. MySpace and Facebook once occupied the position that Twitter now stands in. Once the ads appear, the core of fashion users who attend South by Southwest migrate to the next big thing, feeling betrayed by the free service they have been using and enjoying for years (and, to be honest, have been conditioned to expect to be free of both charges and advertising). So what can Twitter do to avoid suffering that fate?
Innovate.
While Facebook’s “social advertising” was an absolute disaster, they had the right idea: Take what you do best and make it your version of traditional advertising. No advertisements. No contextual text ads. No pop-ups (for crying out loud, no pop-ups). Take the social interactions that drive the popularity of your service and create ads that fit that shoe. Twitter could do this: Twitter users could have a checkbox in their profile that allows Twitter advertising partners to send them Twitter ads occasionally, based on keywords taken from the Twitter user’s tweets over a certain period of time. Discreet for Twitter users as it is part of their regularly scheduled program, it is well targeted and has great potential to include advertisers’ Twitter names.
Ultimately, the most important thing is that Twitter monetize. This is not 1998, and the business community will not value a service without some method of making money. It is up to Twitter to decide how to do this without alienating its user base and becoming another fallen social media giant. Twitter needs to ask itself a few questions before continuing: is it so bad to be the next MySpace (after all, they got a ton of money from Google in exchange for their advertising woes)? How much credibility are they willing to sacrifice for cash, if any? And, perhaps most importantly, how influential are the Twitter pioneers, and how much damage would Twitter suffer from watching them leave?