Twitter's Business Model
March 24, 2012 at 1:16 pm #156940
from Nicole Ferraro Internetevolution Blog
Twitter: From No Ads to Doing Avertising Wrong
Earlier this month, BusinessWeek published a report hailing Twitter as the "startup that wouldn't die." There's truth to that. Despite myriad problems it faced as it was growing up (like, managing to stay up and running), Twitter remained alive thanks to investors who kept handing over their cash and thanks to the platform's sheer popularity.
But I would be careful to call Twitter a success story. Rather, based on where the company is now, Twitter should serve as a cautionary tale for new companies -- an example of what not to do.
At six years old, Twitter is only beginning to earn actual revenue. According to eMarketer, it's expected to earn $260 million this year. (By comparison, Facebook is said to have made almost $4 billion in 2011.)
Well, you might say, "so what?" Twitter only rolled out its advertising platform in 2010.
That's true. Despite the fact that Twitter is six years old, its advertising model has only been around for 18 months. Why? Because Twitter all along was supposed to have a business model way more compelling than advertising.
But as we all know now, not only is Twitter serving ads, but it's doing it in a way that doesn't consider the user experience. The company has done this by showing users Sponsored/Promoted Tweets from accounts they don't follow. And now, Twitter declared this week in a blog that it's going to start serving these paid-for tweets on people's mobile devices, "enabling brands to target Promoted Tweets to mobile users that share similar interests with their existing followers."
There's a name for this, by the way... sending people marketing messages they didn't ask for and can't opt out of. It's called spam.
March 28, 2012 at 5:22 pm #156946
A little elaboration - Will these be like updates on your phone, or just in the app itself? For example if there's a new Groupon offer my phone notifies me, would it be like that?
March 29, 2012 at 8:26 am #156944
for example, if I get a tweet from you, Twitter will include "advertising" for Chase Credit cards or whatever vendor has paid for the honor of "spamming" my "inbox"
April 13, 2012 at 3:05 pm #156942
That would be most unfortunate and a huge turnoff. I do wonder what Twitters' original business model was supposed to be, if not standard advertising?
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