Twitter...what is it good for? It turns out this little service is good for a whole lot of things, despite the loud objections of people who've never really tried it. Even among true believers, though, it's been hard to figure out how this much loved company is going to afford to stay alive. How will Twitter make money?
A number of people noticed a new change made to Twitter today that could show just how it's going to happen. Of course this is just speculation, but we believe it's a pretty good guess that this could be what goes down.
Professional hustler turned CEO Jason Calacanis spelled it out on Twitter tonight. The new Twitter "suggested friends" feature (first blogged by Pete Cashmore) is a natural place to sell friend connections between users and companies wanting to communicate with them.
Who says you can't buy friends? $1 per user who takes the suggestion and opts in to getting messages from @JetBlue or @Zappos? That could happen. Could those companies keep their freshly purchased friends? Only if their Twitter output stayed interesting!
In order for this to work, Twitter is going to have to make these recommendations a lot more prominent in the user experience and it's going to have to increase the quality of the non-paid recommendations. Right now they don't look very exciting to us. We like to search Twellow to find interesting new users to follow.
A Logical Opportunity
It's a common tactic among Facebook apps for the little ones to buy introductions to users from the big ones. It's pretty traditional lead sales, in fact. We'll see if something like that works with Twitter - it's certainly better than advertising that you don't have any choice about receiving!
Outside reports indicate that many Twitter users struggle to find friends on the service. Almost 10% of users haven't added anyone as friends at all, in fact, something that would make the service fairly pointless. Put that together with the fact that, according to a study by trademark attorney Erik J. Heels, 93 of the top 100 US brand names don't appear to have control over their brand names on Twitter. Put those together and what have you got? An opportunity for Twitter to make money.
Would this be enough money to make Twitter viable? That we're not so sure about. Outside reports put the number of Twitter users at 4 or 5 million users, and that after everyone from CNN to Britney Spears to The_Real_Shaq has jumped on board. How much bigger is it likely to get? We don't know, we just know we like using Twitter a lot.
When Evan Williams started Twitter, he didn't care. As Sarah Lacy explains in Once You're Lucky, Twice You're Good, Williams had enough money in the bank from the sale of Blogger to Google that he didn't have to think about Twitter making money and he didn't want to think about it. That changed quickly when scalability required backing from investors and Twitter became a real business. Now it's the biggest question many of its users have about the service they love so much.
You can meet and be friends with the ReadWriteWeb crew on Twitter for free! Just check out this slide show of all our accounts.