How Twitter can start to turn a profit

Twitter is huge these days. It seems like every other week you hear about another venture capital firm pumping a few million dollars into the service, and as of this writing, Wikipedia reports that around $55 million of venture capital is currently invested. With every one of these stories, you also hear the story about how Twitter has yet to come up with a business model that will allow it to both make a profit and remain pure to its users. Ad supported content doesn’t work very well, not only because ads would interfere with the clean, straightforward, and customizable interface already in place on the site, but also because a large percentage of users use a platform other than the web browser client for updating status (like texting updates or using iphone, blackberry, or other smart phone apps). Another thing that obviously won’t work is to just charge users a fee for the service. The day that happens is the day I go out and start and replicate the service, but for free and get all of the VC that just pulled out of Twitter.

The problem with charging for the service is that most users are in it for personal use and fun. They don’t drive business to themselves or their company, and as a result, the cost wouldn’t be worth it to them. There are several people and organizations who rely on Twitter as a part of their marketing strategy to drive additional traffic.

I propose the developers at Twitter write a suite of tools designed for companies and individuals with this in mind. By implementing a number of useful communications tools, they could provide a number of incentives for companies to purchase a subscription to the service. Things like being able to do mass messaging, organizing users into different groups, and an analytics and data mining application designed to quickly see things like the most important followers, most popular tweets, and most active time of day for your user demographic would all be invaluable tools and could be used to effectively drive traffic and profits even higher. Hopefully it would serve to drive Twitter’s profits anywhere at all.

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