Will Twitter Start Charging?

Twitter chargingTwitter has been the Internet success story of the past year. Founded in 2006, the micro-blogging service sends 3 million messages per day and has been adopted by every technologically-aware celebrity. Even Twitter’s highly-publicised technical problems, the downtime, hacking attempts, and news of a celebrity-snooping TV show has not put people off (although only 40% of accounts remain active a month after signing up).

As a start-up, Twitter raised $55 million of venture capital and now has an estimated value somewhere in the region of half a billion dollars. Even your own Twitter account could be worth something: according to TweetValue.com, sitepointdotcom is worth $10,991 and Stephen Fry is $42,542. Even my own paltry effort is worth $25 (all bids considered!).

It’s not bad for a company that is yet to earn a penny. So why is Twitter worth so much, especially during an economic downturn?

One possible reason is that Twitter captures the very essence of people’s interests and aspirations the moment they have them. Let’s say I’m considering buying a Foozle. I’ve looked around, tweeted about it, got a few responses, and found a best price of $100. At that very moment, Foozle Corp contacts me directly and offers their top-of-the-range model for $80. They have caught me at my most vulnerable time; I’m actively considering a purchase and will probably proceed without looking at alternatives. I’m also likely to rave about my savings in subsequent tweets.

Dell is one company that is already benefiting from this type of marketing; they recently announced revenues of $3 million as a direct result of Twitter posts.

Twitter’s value owes much to the data-mining possibilities:

  1. The service is unbiased, independent, and free.
  2. Users represent a broad cross-section of society.
  3. Twitter usage is growing at an exponential rate.

However, Twitter cannot survive on potential alone. They need income and are reportedly looking into ways of monetizing the site. CEO Evan Williams has stated that he is not opposed to banner advertising, but was unenthusiastic as it would be “the least interesting thing to do.”

One option being considered is an authentication service; companies would pay to ensure impostors do not send messages in their name. Technically, that could be a tough one to implement.

But Twitter must be careful. If they start charging for any aspect of their service, they will reduce the number of existing users and new sign-ups. It could also skew membership toward those who have the biggest financial benefits: the corporations.

I can’t see many options other than:

  • Advertising. Unfortunately, adverts would probably need to be added to tweets since many people use third-party services rather than Twitter.com.
  • Data-mining tools. Companies might pay for Analytics-like tools, although many are already available since much of Twitter’s data is exposed via their API.
  • A better API. Perhaps they could charge for improved data access?

Speculation will remain rife until a final decision is announced. Can Twitter raise revenue without losing members?

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  • dave

    how about charging a tweet fee but only if you exceed x number of hits a day. this would be set high enough too ensure free non commercial use. just a thought

  • Silvia Pfeiffer

    Twitter could also provide a services that only they can deliver because they have, e.g. the email address of the user. For example, if could allow companies to upload “special offers” campaigns to them and whenever somebody twitters about “special offers for xxx”, they would send out an email with the special offers for company or brand xxx. I can imagine many more such services.

  • Thorsdal

    Advertisement tweets wouldn’t be so bad. Those who want to turn off advertisement tweets, could pay for the privilege. You would also want to set up rules to only tweet advertisements that are relevant to users (based on keywords from their ordinary tweets). That way they wouldn’t nescessarily be ignored, and their value would increase, thus raising revenue from the advertisers.

  • opeyemi

    Twitter is that they should have thought of the monetization idea right from start – every startup should as it is a very vital part to keep it alive. Since millions of people still use Twitter from web daily, the ad thing can still work, though not as effective as it would have been if 3rd party apps are involved as well. But to add the ad to Tweets? Nah! That will be ugly! The sponsored definition in users home page makes more sense.

  • http://bendavis.me stressonthesky

    Perhaps just a separation of commercial / PR usage and personal use: Flickr style; a basic but free account for those who use twitter like a social network to keep up with friends (facebook without the chaff) and a paid account for companies and celebrities who use it as advertising themselves.

    I hope they don’t just stick adverts on there. Part of Twitters’ pull for me is that it isn’t clouded with a million apps/logos/signs all clamouring for your attention. It’s clean, simple and anyone can use it.

  • robinthomas

    what about this approach ?

    Sponsored tweet.

    Twitter can push a sponsored ad (sponsored tweet) at a particular interval , say once in a week , or for every 500 tweets they follow.

  • http://www.clanspace.com.au Robbo89

    They should have had some form of income for it from the get go. Adding features for them to make money after they already have lots of free stuff is a bad decision because once they put something in that changes how twitter works so they can make money then there will most likely be a backlash.

    Also I integrated twitter into a website a while back and their API seems fine to me as long as you make a nice class to handle everything.

    PS. I don’t see how twitter is such a success other then staling celebs.

    PPS. I’m a little under the influence so I might not make too much sense sry…

  • http://welcome2obscurity.blogspot.com/ EvanKroske

    I think Twitter’s best chance for profit is to charge for followers above a certain amount. Perhaps people would have to pay for the ability to have more than 9999 followers, and the rates would increase as their follower numbers increased. Few people ever reach 10,000 followers, so this rule will apply mostly to companies and celebrities. Also, if a normal person reaches 9999 followers, the people who aren’t allowed to follow him will ask for him to upgrade. The users will pressure people to upgrade so that Twitter doesn’t have to.

  • https://twitter.com/scotthoff scotthoff

    My account is only worth 6 bucks!

  • Michael

    I would charge per tweet for users who have, say, over a thousand followers. I would think those users wouldn’t have too much of a problem paying for a brand-extension tool.

  • http://michaelcarrano.com Carranom

    Perhaps Twitter can monetize on what we Tweet about.

    For example say someone Tweets:
    “I’m reading this great book called Old Man and the Sea”

    Maybe Twitter can have the keyword Book be linked to Amazon, eBay or some other major online store. Or get more specific and have it linked to Amazon listing of Old Man and the Sea.

    I wouldn’t mind having my Tweets monetized this way.

  • i love twitter

    I will be member of twitter for whole of my life, if they charge for their service or not.

  • http://bendavis.me stressonthesky

    Interesting that the twittervalue website featured has recently had their own twitter profile (as linked to from their website) closed. Strange activity apparently. Although no juicy details to report..

  • http://www.WebTrafficAcademy.org RogueScripts

    There is no good way to monetize a site giant social network, except to add ads. That’s what its going to end up being folks, like it or not.

    Either that or they are going to go the way of craigslist.

  • priye

    I have an account with 10K followers..TweetValue says my account is worth 3200$.. Am looking to sell it for 800$.. (ESCROW)

    - Edynamitez@gmail.com

  • W2ttsy

    I am currently building an application that allows users to have the application insert tweets upon successful actions. For instance if they were to attend an event that was organised via our app it would insert a tweet for that user that said “xxx is attending Staff Picnic on Saturday”

  • W2ttsy

    No reason why twitter couldn’t charge 3rd party providers (such as myself) an insertion fee or charge credits per month to do this

  • http://www.thegreatindiandesign.com electroskan.com

    My twitter account twitter.com/sreeraman is worth $277 according to http://tweetvalue.com/

    Whew…I never accepted that much!

  • lendager

    wow! my twitter account value $45

  • Luke

    I don’t really see how they could charge for a basic account, if they begin to charge for a basic account somebody will just create a twitter clone and steal their users.

  • http://www.jasonbatten.com NetNerd85

    When I think of Twitter I think of the movie Idiocracy, http://www.imdb.com/title/tt0387808/

    Watch it, you’ll start hating society just that little bit more…

  • http://www.mummy3trailer.com ljastangs21

    they should charge a 5% fee for every tweet…no only sp would do that

  • hairybob

    What will they do when people wake up and realize that knowing when someone is brushing their teeth isn’t something that creates any value (for anyone).

    Twitter is just another time waster that, like many other social phenomena of the past ten years, will slowly lose its way. Without any viable revenue stream, this might come sooner rather than later!!!!

  • http://www.spanishhotproperties.com/ SpanishNick

    What about there text updates couldnt they charge for that, I dont know if they charge now but that seems the obviously place to start but a a very low level. They will have to do some form of advertising. With there customer base they should be making money, maybe google will buy them an put addwords on the site

  • webhost.uk.net

    I hope they dont do so , so early

  • p2409

    Twitter’s on the way out. It’s not new media (anyone get anything of any worth in the recent Iran election hoohah? No – self-obsessed, predominantly American people drowned out anything relevant happening on the ground). It’s also become pornicated (“Josie Adams has added you blah blah”). Cute timewaster while it lasted.

  • http://www.digitalgreenlight.com busy

    For all the naysayers, I can think of three examples of people making money because they use Twitter.

    One is Dell, which was mentioned in the article, one is a company local to my area sells out of certain products very quickly by tweeting when shipments are in, and one is me. A designer I work with gets the majority of his new projects from connections he has made on Twitter and that means work (and money) for me.

    If you’re not able to use Twitter for anything useful, that’s on you. It’s a great service and has tons of value for those of us who use it well.

  • http://www.ohashi.us kohashi

    Twitter has sponsored ads already, so the part about not making a dime isn’t really quite correct.