Monetizing Twitter

Twitter is a hugely popular service however it has almost no income and is bleeding money by the barrel. It has somewhat painted itself into a corner as to its revenue options. Here's what I believe is the only reasonable choice it has to make money:

Twitter has a public API (Application Programming Interface) that allows inquiries into its database of user profile and tweets. That allows anyone to copy the whole database if they so choose, and several websites have so chosen; they completely mirror Twitter, e.g. twitoaster.com, and others have subsets such as celebritytwitter.com and tweetsoup.com. Even IMDb copied tweets from its index of actors and other in the industry. Google and other search engines index tweets as well. They're effectively stealing from Twitter! Those sites have advertising so their income is higher than Twitter's! Twitter has announced that they will be adding advertising to their website but that is totally bypassed by those using the parasite sites and the many smartphone applications, so its share of views is only a fraction of of those using Twitter.

Facebook has a similar problem: There are a growing number of alternatives to their website, including smartphone applications. Those generate no revenue for Facebook. They are trying to stop that, for example suing Power.com, but that's being met with significant opposition.

Twitter reported that in February 2010 it had over a billion tweets. Multiply that by the growing numbers of tweets per month and you get many terabytes of data. Each tweet is saved to disk and each one is searchable. That takes a lot of computing power that is overloaded at times; try getting older tweets in the middle of the day and you'll get a "Something went wrong" error. Twitter needs more computing resources but can't justify the expense without revenue.

It's obvious that an advertising-based model for Twitter can not succeed; there are too many ways to avoid seeing any ads. Twitters only possible choice is to charge its users. It is not feasible to charge those viewing tweets, you don't even have to login to do so. It only makes sense to charge users per tweet. Since you must sign-in to tweet, there's no way of avoiding a charge. If each tweet cost just 0.1¢ that would bring in over a million dollars per month. I'm not privy to Twitter's balance sheet, but that's probably more than sufficient to keep them going. Yes, that charge would discourage some from making as many Tweets as they currently do now, but if what you have to say isn't worth 0.1¢, then it's not worth saying and would improve the signal-to-noise ratio.

I don't see that many users would leave Twitter in protest even with the pervasive feeling that the Internet should be free. After all, sending a text message from a cellphone costs at least 10¢, a hundred times more! Of course the phone companies have unlimited texting plans but those are at least $20 a month. I have no idea what the average number of tweets per month per user is, but my own count of tweets is around 1000 per month. That's just $1! Who realistically could object to that?

I'm not sure why Twitter thinks they can survive with an advertising-based service and is not implementing a per-tweet change, but they must eventually see the tweeting on the wall.

Taylor Swift