foldier’s blog

Twitter makes no money.
Zip zero. Nada.

It is almost counter intuitive that a service with approximately 2,173,121 users has no revenue stream. They have investors, but no means of generating revenue yet.

Within those 140 characters and 2,173,121 users, someone or company is going to bet that there is valuable and needed market research to be had. Wholefoods and Starbucks have used twitter for market research, but the aggregate information from twitter could present an easy snapshot of information, not to mention dissecting the information with various statistical analysis to present sweeping conclusions. Imagine having real time information for a reaction to TV shows or your newest line of Pepsi-Cola?

Somewhere in the not too distant future, twitter or some larger company who will purchase twitter will attempt to rectify the number of users to use information and generate revenue. Of course, this is no easy task just ask facebook or myspace. We want to look at a few probable outcomes for the future of twitter.

1) The buy-out option: This is a classic exit strategy. Build a huge user base without worrying about the revenues, sell the company and let the buyer solve that problem. Most recently, Apple has been rumored to want to buy twitter. Microsoft, News Corp, and Google have also been linked to purchasing twitter. Techcrunch recently wrote how Amazon would be a perfect suitor for Twitter. Each company could utilize tweets for various purposes. With the co-founder of Twitter recently announcing that he planned a completely separate start-up and buzz about companies approaching twitter for a buy-out, this option seems like the most likely presently.

2) The fizzle-out option: In this scenario Twitter is overtaken by a different service that offers better functionality and more reliability. The talk going for about a year or even longer is that Friendfeed will overtake twitter. Projecting catching lightning in a bottle is incredibly difficult. The major criticism of Friendfeed is how functionally seems exponentially more complicated than Twitter. The developers at Friendfeed have noted this criticism and have recently changed the interface to appear simpler. Technically, Friendfeed’s capabilities are superior, but that is inherently its problem. With twitter’s meteoric rise in the past year, it is possible to imagine it falling as quickly. We are nearing a seemingly apex of the influence of the twittosphere. There is a degree a palpable saturation with twitter. It seems to be omnipresent in today’s culture, so there can easily be a Myspace effect of disinterest. Joel McHale’s “The Soup” dedicated a segment to Twitter’s cultural effect in television.   Finally, Google has announced Google Wave.  Twitter has been a buzz about it and is currently the third most tweeted about phenonmenon.

3) Absorption option: Twitter is absorbed into other services much like the browser a decade ago. Facebook has already made one’s friend’s status the focal point for a user’s homepage. Facebook just recently they adopted a refresh page that the twitter home page does not offer. Nova Spivack recently wrote that Web 3.0 may be defined as a “stream.” If Mr. Spivack’s theory were proved to be correct, Twitter may not be rendered obsolete, but would like become on of many “streams” of information. Twitter basic function could be replicated a thousand times over by different services and as it has so much commercial appeal would become common place and not unique to twitter. Twitter holds the obvious advantage right now with its number of users.

4) The API option: By now, you are familiar with Tweetdeck and Seesmic Desktop. These are just two applications that take advantage of the Tweeter API. In fact, there are many more out there. What if Tweeter started to charge a fee for the use of the API functionality? In this model, the customers for Tweeter are other companies that build consumer applications on top of Twitter. This is very similar to the model used by Amazon on AWS (Amazon Web Services). Twitter here offers a very simple API and very simple functionality, but what these API really offer is the access to the huge user base. Twitter has laid the foundation for an API that could be invaluable!

Predicting the future of twitter is next to impossible. They seem adamant in not selling, perhaps, they have masterminded a plan to unveil newer features to keep twitterers engaged and have a marketing plan all on their own like the new ranking system they are adding these days.

One thing to be sure of is the coming months for the owners must walk a tight rope risking over exposure, maintaining the simplicity of the service, adding new features as not to be stale, competition, and the ridiculously large sums of money if they want to remain relevant and be the sole owners of Twitter.