Feb
03
posted at: 10:22 PM
Mashable had an interesting article yesterday that was yet another speculative piece about how they think Twitter can make money. If you didn't already know, Twitter has no business model, and has survived off of venture capital funding since their inception back in 2006.
This graph I made over at crappygraphs.com summarizes the Mashable article quite nicely:
This is certainly an overstatement, and Mashable does raise an interesting point about how Twitter could use sentiment analysis as a potential way to rake in the cash without driving away their user base with obtrusive ads.
My take, to play devil's advocate a little bit, is to ask how viable Twitter really is as a platform when they currently have no stable source of revenue. The greater web community has placed a lot of stock in how this relatively simple idea has exploded and spawned a gigantic community of influence, but we're on the verge of Depression 2.0 and Twitter hasn't made a cent.
One can argue that Twitter is sitting on a gold mine with their current user base, and that there are countless ways one could monetize their product. But what if it doesn't work out? What if their revenue isn't enough to sustain themselves? Or what if Plurk, or another competitor steals away the user base and Twitter folds?
Hopefully we haven't forgotten what happened to Friendster after MySpace came along. MySpace was cooler and more attractive at the time, and Friendster has since had to resort to more of an international model. Facebook is now doing the same thing to MySpace in stealing user base, as they're just simply executing everything better than MySpace. It's a more attractive offering.
I'm confident that Twitter has a clever plan, in that they passed on a sale opportunity to Facebook. Hopefully they will execute in time to weather the coming storm.