Twitter revisited
Those of you who know me, also know that I am not a friend of Twitter. Not yet! But this medium for micro-publishing seems to grow and grow. Swiss blogger Nico Luchsinger has counted some 800.000 users. So there is quite a good track record and the only thing missing is the business model.
But a call for advertising is not really funny: In my opinion the short message like style of Twitter would suffer a lot from advertising. Twitter simply is not made for it, besides the fact that in a commercial consisting of one sentence there is not much to tell. So Twitter needs something very different. Why doesn’t a company like IBM buy Twitter? They could continue the service without any changes. In financial terms this idea looks quite stupid. Why to buy a business where there is no revenue stream at all? Well, first of all, Twitter is a brand. And a very well reputated one, too. A company buying Twitter would invest into branding and image.
But that’s not all: My german blogger friend Marcel Weiss reminded me of the fact, that Twitter is an open plattform offering an API for developers. And that’s where things start to get very interesting: Twitter as a market leader in its segment can be seen as an exchange place and not all services made along the API would have to be free.
One example: Imagine the “twittersphere” would be scanned by semantic software in order to obtain or extract clue words, ideas and trends from it. Who is talking on Twitter? It is a global elite that is far ahead concerning technology, social media and general information. So following Twitter is market research 2.0. The data mining could be used for trend reports or aggregated publishing on websites which would not be free of advertising. All this would not hurt or disturb the twittersphere. And my opinion, that services like Twitter never will be a sort of mass media, fits very will in our example. Twitter as a tool of a relativly small but focused user group creates a homogenous market segment worth watching. The value would be exactly the opposite of what it is for Facebook or MySpace.
Finally there is the question of prize and worth of Twitter. If we take the level of Facebook as a sort of benchmark we would end up with a prize of aproximately 300 million $ (calculated on the number of users). Ok, that’s a lot of money but it would not be expensive for one of the market leading companies in IT.
Coincindentally, I finally registered at Twitter.
I agree that Twitter is probably used by the early adopters and will not be adopted by the masses.
(btw you probably want to change that “oder” in the second to last paragraph to English =))
What I disagree with is your estimate of Twitter’s worth. You say that advertisements are not for Twitter, yet this is the source of revenue for Facebook, so one would imagine this hurts Twitter’s worth a lot. Second, and more important in my opinion, is that who would be interested in Twitter and why? Why IBM *would* buy Twitter?
Okay, Sun bought MySQL and Yahoo has bought some stuff earlier for no apparent reason? Any company interested in data mining Twitter can do that without buying the whole thing, anyway.
Comment by Kari Silvennoinen — January 19, 2008 @ 4:44 pm
Kari, thanks for your help with my poor English! Sorry to all readers of TIE…
Advertising is the main (and only) idea for most web 2.0 businesses when it comes to earnings. This is a certain weakness and shows a lack of creativity.
Although I am not an IT expert I don’t believe that “any company interested in data mining” would be able to follow all Twitter conversations. At least it would not be legal - roughly the same as Robert Scoble trying to take away data from facebook and implement it on his Plaxo profile.
Comment by Matthias Schwenk — January 19, 2008 @ 5:58 pm
Hey Kari, what’s your Twitter address?
No comment from me on the Twitter-business-model. To me it’s like RSS—very valuable but impossible/very hard to monetise.
Comment by Vincent van Wylick — January 19, 2008 @ 6:51 pm
…though how hard would it really be for the first message of the day to me to be: “Hi Vincentvw! Your Twitter for today is sponsored by Orange Cola, the coke that’s not quite like coke, not quite like lemonade!“
Comment by Vincent van Wylick — January 19, 2008 @ 6:54 pm
Yes, Vincent! And at lunchtime the message would be: “Hi Vincent, don’t forget your lunch break - McBurger is just round the corner.”
Wouldn’t that be nice? Never starving again?
Comment by Matthias Schwenk — January 19, 2008 @ 7:02 pm
Now that would annoy me. If you want a taste of the experience, try Twitterific for the mac. It employs that particular business-model (ad-insertion). It really disrupts the experience. No, I’m talking about a 1 per day sponsor, preferably when you start up the service.
Comment by Vincent van Wylick — January 19, 2008 @ 8:53 pm
ok, ok. I only wonder why no one of you is excited about my semantic software idea!
In Germany you can find today at least 15 to 20 startups and some established software companies that work on the field of semantic software. It’s a big issue here!
Comment by Matthias Schwenk — January 19, 2008 @ 9:02 pm
I don’t know. Maybe it’s to do with that fairly little is written about semantic software on Tech IT Easy
And because, perhaps, semantics work just as well for the whole internet/blogosphere, instead of just restricting itself to one micro-blogging service where content is fairly limited.
Comment by Vincent van Wylick — January 20, 2008 @ 11:02 am
And from a privacy / ethics standpoint, I’m sure there are some serious objections to be made about making Twitter essentially a data-mining-service. Just think about what happened to Facebook’s Beacon-project.
Comment by Vincent van Wylick — January 20, 2008 @ 11:26 am
As I got to know today Twitter already is a sort of a data mining service. If you want to follow a certain term on Twitter, you can subscribe to a service, that will get you informed whenever that term is used on twittersphere.
Comment by Matthias — January 25, 2008 @ 1:22 am
[...] anspreche, ich nur ungläubiges Staunen oder Desinteresse ernte. Im Januar schrieb ich über Twitter (in englischer Sprache auf Tech IT Easy) und dessen fehlendes Geschäftsmodell. Wie die Kommentare [...]
Pingback by bwl zwei null » Technorati auf neuen Wegen — March 3, 2008 @ 8:01 am