Comments on: Solving the Twitter Business Model Problem – Your Guess is Probably Better than Mine

By: chudson

chudson — Sun, 31 May 2009 21:29:53 +0000

Thanks for the great comment, James. I'm thinking of doing a post along those lines at some point. There are so many other people speculating on Twitter's business model that I am having more fun reading their posts than I would drafting a post of my own.

By: james

james — Sat, 30 May 2009 16:04:55 +0000

additionally, if twitter should ever offer any investment opportunity, it would likely be absurdly overvalued given the popularity of it. kind of like how in 1999 people would buy stock in starbucks because they enjoy the taste of the coffee (and paying about as much of a premium for the stock as for the coffee). I'd like to hear what you think of it's revenue generating capabilities, hudson, since you seem to be something of an expert on this. I know little about how online businesses and cloud computing generates cash.

By: james

james — Sat, 30 May 2009 15:58:33 +0000

well done, good job writing this. There has been a lot of speculative gurgling about twitter and cloud computing lately. there is just one thing which they never talk about… the revenue generating capabilities of twitter. of course, the website receives a lot of traffic, but so what? twitter is free, at the moment it has zero ads (and adding ads will tend to drive traffic away and many people use ad-blocking services or do not pay any attention to it), and I like your point on the psychology of its users who will be turned off if it suddenly starts asking for money to use the service. if it has revenue generating possibilities, would it not be insignificant? how much money does facebook make through advertisements? how much does myspace make? not only that, but one would argue that twitter has fierce competition from other social networking websites (or that it is complementary to those websites).

By: Slide Show of the Day: PCMH « Tacara

Slide Show of the Day: PCMH « Tacara — Fri, 06 Feb 2009 16:48:17 +0000

[...] Here’s why: Web 2.0 spawned several platforms, including the admittedly troubled Facebook and Twitter, whereas Health 2.0 has yet to do so in any significant way. Being the platform is a far more [...]

By: chudson

chudson — Wed, 28 May 2008 19:51:51 +0000

I think there's a marked difference between having a business model that needs scale to be effective and using the need to achieve scale as an excuse to punt on thinking through what model you'll employ once you've achieved scale. I see a lot of the latter and not enough of the former.

By: chudson

chudson — Wed, 28 May 2008 19:50:23 +0000

Jason,

I generally think charging 3rd parties is a good way to go. The only problem is that most of the 3rd parties using their service don't seem to be making any money either. I'm not sure how much they'd be able to pay and for how long.

By: ndintenfass

ndintenfass — Wed, 28 May 2008 16:12:42 +0000

And yet conventional wisdom seems to persist that consumer Internet companies shouldn't bother to worry about a business model in the early days…

By: Jason

Jason — Tue, 27 May 2008 12:51:39 +0000

Seems like they need to find a way to charge the 3rd parties using their service. Couldn't they just charge anyone with a distribution list greater than 100 people? That would scale nicely with their infrastructure costs.

By: Doug

Doug — Tue, 27 May 2008 02:03:46 +0000

Charles – We've talked about this same subject in different words before and it comes back to the question as to weather or not Twitter and other Web 2.0 companies are really viable businesses. Perhaps we are, as we did with Web 1.0, overvaluing traffic and activity. The other element to this equation is that the cost of deploying this service is too high, perhaps by a factor of 10 or 100. Even if some revenue can come of this, it's not clear that it would be a home run vs just a nice little business. Facebook hasn't done it (yet), Meebo is getting traction. PatientsLikeMe is doing very well as they are in a rather lucrative market (health care marketing). Everyone else is pretty much living on venture cash. So it's not clear that Web 2.0 ever had any legs – just attention. And attention doesn't pay the bills the way Cash does.

By: amitav

amitav — Mon, 26 May 2008 16:00:04 +0000

Though I suppose if I'd read your earlier post on the enterprise and web 2.0, I'd already know how you feel about this…