How Will Twitter Make Money?

Many people believe that Twitter is a flash in the pan and will disappear as the novelty wears off and people move on to the next new thing. One very similar competitor site (Jaiku.com) has already emerged. For now however, according to Steve Rubel, Twitter has over 100,000 users and the size of the community is doubling every three weeks.

The main challenge for Twitter moving forward will of course be its ability to generate income. Rubel asserts that Twitter's most active users are quite influential (including him), and that many users voluntarily receive messages via IM and mobile phones. He maintains that if Twitter's parent company (Obvious Corp), or possibly a company that acquires Twitter, can think of a way to let the community opt-in to commercial mobile messages, Twitter could turn into a real cash cow. He points out that over 1700 users already opt-in to receiving messages from Woot on Twitter, so it's not mere speculation, even at this early stage.

Rubel makes some good points. It's true, many users don't seem to have a problem with receiving constant messages by IM and mobile phone via Twitter, although this could become quite selective as the number of users escalates, say to YouTube or MySpace levels.

I've noticed that a few well known news organisations including The New York Times, CNET News and BBC World Service have already started to deliver messages on a very regular basis, so the potential for a wide variety of corporations to use the site is obvious (so to speak). None of them really have a decent following at present, but it's still very early days.

What is significant about the nature of Twitter, is that a lot of users seem to be keen to tell others which products they use and trust, and where in the world they themselves are located. It will be possible for marketers to act on this information in various ways. This will have to be achieved in ways that are not intrusive, or the tech and media savvy users could be turned off.

Twitter could go down the route of displaying banner advertising and user profile branding on the actual site, which have become ubiquitous on YouTube without denting its popularity. There is always Google advertising, and Google the company to take into account. Could Twitter become another acquisition target for Google in the near future? Google is undoubtedly interested in the mobile space.

See you on Twitter.com/jjprojects