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03 Sep 2011

Peter Kafka at AllThingsD warns of coming changes to the Twitter-verse:

Coming to some of you, in about a month: Ads in your Tweetstream, from Twitter accounts you don’t follow.

Twitter is steadily trying to increase the number of places where advertisers can get their message across, without spooking users who generally think of Twitter as an ad-free zone.

About damn time.

Twitter needs a revenue stream. They have needed a revenue stream from day one, but decided that developing a strong user base was more important than making money. Now they have 200 million users and are valued in the multi-billions, but are not collecting anywhere near the amount of money they need to in order to be an actual business.

I have often thought that I would be happy to pay for my Twitter account, if only because @Rayke and @phyllisstein are there, but offering my money and actually paying up are two different things–not to mention, getting everyone to pay up as well. How much of my hard earned money would I be willing to give to Twitter? If Twitter, tomorrow, disabled tweeting for anyone who would not pay a $10 monthly fee, what would happen? $5? $1?

No matter what the amount, many users would leave. Most casuals and even some of the regular twits would find another way to get their thoughts out into the world, 140 characters at a time. Twitter is a blogging platform. It is a convenient way to casually express thoughts, but there are other platforms that offer similar services.1 If Twitter moves too quickly or overtly, there will be an exodus and someone else will pick up those who Twitter pushed away.

Advertising may not be the silver bullet and, no matter how well it is done, there are going to be those who take offense. It will be unfortunate when Twitter loses users in order to make money, but that is a natural consequence of ignoring the business aspect of a web company.

(Via Watts Martin)

  1. Hey tumblr, where is your revenue model?