As the Twitter train continues to roll, one obvious question remains unanswered. How exactly is this free service, enjoyed by many and abused by others, going to cash out? Newsday published an AP article raising the obvious:
One vital ingredient has been missing so far: revenue. That raises questions about whether the nearly 3-year-old service can make the leap from intriguing fad to sustainable business.
Twitter Inc. intends to start testing ways to make money this spring. Co-founder Evan Williams promises it won’t drive away the more than 6 million people who have at least set up accounts.
Can we hold him to this promise? It’s a good question, because as much as I have become a reluctant twitterer, I have no plans on paying for it. Not even on a per twit basis. They are welcome to advertise all they want, but I’m no more likely to click on their ad than on anyone else’s, except for my errant occasional keystroke. So what’s the plan?
“We don’t see any reason why this can’t be a very large and profitable entity,” said Williams, the San Francisco-based company’s chief executive.
Williams, 36, won’t say what he has in mind besides selling ads, but he and the handful of others who own privately held Twitter seem confident the mystery strategy will pay off, even as a devastating recession destroys much-larger companies.
Well that clears things up. Not. We’ve heard other internet business make similarly promises in the past, generally within months of their crashing and burning, meaning cash burn as the venture capital gets spent in the absence of any executable plan to bring revenue in. As much as we may love the technology, our love doesn’t pay the bills.
But it’s not as if Evan Williams is worried about where his next meal is coming from. He’s got prospects:
Just three months ago, Twitter rejected a $500-million takeover offer from Facebook Inc., the owner of the world’s largest online hangout.
Although shooing away Facebook was risky, Twitter isn’t under immense pressure to generate revenue. The 29-employee company has already raised $55 million, including a $35-million round recently completed with Benchmark Capital and Institutional Venture Partners.
Memo to Facebook: Since you have half a bil in loose change to spend, there’s a very nice blawg that just might be available. And I’m fairly certain you could nail it down with a mil or two left over.
In my perpetual effort to be helpful to others (because that’s the kind of guy I am), let’s run a contest. Anybody with a way for Twitter to make some money, post your idea in the comments below and if Twitter uses it and becomes fabulously financially successful, Kevin O’Keefe, who is personally responsible for almost every person on twitter, will do everything in his power to make sure that Williams splits the baby with you.
Don’t be shy and no idea is too crazy. It’s impossible to get too crazy when it comes to Twitter turning a profit.