Twitter’s business model – one big focus group
Much has been made about how Twitter keeps getting money handed to it hand over fist even though it has no apparent business model that will let all those VC folks make their money back – let alone make Google like profits. There’s no denying that the little service that could fail at the drop of a whale; and did many time in its early years, has become more rock solid and continues to add new users every day. Twitter is the new – and popular – means of short form communication on the web and doesn’t look like it is stopping any time soon.
All that said though the question still remains the same – how is it going to make money?
It’s not like it is suddenly going to be able to institute a payment for services plan because that would cause a revolt almost over night. Sure it could inject ads into the Twitter stream and while people might bitch for the first while they would settle down and accept them, except I don’t believe that the money generated would even come close to what the company needs to show a real profit plus make the VC people happy. As for a Facebook Beacon style of purchase notification would go over as well on Twitter as it did on Facebook so any really type of social trust advertising would be just another lead balloon.
But let’s step back for a second and ignore the idea of advertising. What is the one thing that Twitter has and continues to add to each and every second of every minute of every day?
Twitter for all its light-hearted appearance is a literal goldmine of data but a specific type of data that I think could be worth more to the company than any advertising deal anyone could offer to it. Twitter is a constant growing database of real-time opinions about everything from products to services to … well you name the area and I would bet you would find a rich treasure trove of real-time regular person opinion on that area.
This treasure trove makes Twitter the ideal real-time focus groups whose slightest change of feelings on anything can be tracked. How much do you think that kind of information is worth to companies and organizations smart enough to see this untapped resource. As Taylor Buley wrote in Forbes about Twitter’s new business development guy – Kevin Thau
Thau, 36, says that’s about to change. He says the number of text messages passing through Twitter’s platform has grown 1,000% in the last year. Add to that the fact that users are texting more substantive observations and opinions in real time, and the company has a valuable information database it can sell to businesses.
Thau says Twitter is developing a range of analytics and metrics products and services built around the information contained in "tweets," the e-mail and text messages that pass through its platform. "We can measure the tweets," he says. "We’re trying to figure out what are the appropriate metrics around engagement and how to convey those."
Twitter’s road to riches isn’t going to be paved with some archaic form of advertising platform toss-offs. No, Twitter’s fortune is going to be entirely ad free because it has figured out that it is its own golden goose – they just need to develop the right tools to give other companies the golden eggs they need.