Twitter’s Business Model

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Twitter has been one of the Internet’s great success stories. It is very popular, the brand has international recognition and three years after its launching it has an incredible traffic: in the first quarter of 2010, 4 billion tweets per quarter were posted. So far, this microblogging service has shared the culture of freedom, participation and lack of profit orientation that characterizes the Internet.

But on April 13, 2010, Twitter announced a plan for including advertising on the site. Some users fear that this decission will “polute” the conversations with “promotional tweets”. On the other hand, the venture capitalists that have backed the company are looking for some returns on their investments. Therefore, the key issue is how to make money without disturbing Twitter’s subscribers to much.

The business model based on advertising could work if Twitter’s managers introduce commercial information gradually. They need to listen to the users: their complaints should be a reason for a quick change about how advertising is delivered. Other media outlets teaches us people’s opinion about advertising: they love it if it is not “excesive”, or “intrusive” and if it is focused to their special interests and consumer behaviours.

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2 Responses to “Twitter’s Business Model”

  1. harsht Says:

    I have written about the same issue http://harsht.wordpress.com/2010/04/15/one-cent-per-character-will-celebrities-help-twitter-monetise/

    To me the puzzle for twitter is how to cleverly monetize celebrity accounts. Most celebrities have reached more than a critical fan base and have realized the power of the medium.

    Yet the whole point of being a celebrity that you cannot be charged as you bring the audience ( users in case of twitter). So companies ( advertisers) have to monetise celebrity accounts somehow

    • alfonsost Says:

      Thanks for your comment, Harsht. I will have a look at your blog! Best regards, Alfonso ST

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