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Twitter's business model

Wednesday, January 02, 2008 by Dave Winer.

A picture named ohRudyIsntThisAFunPlace.jpgWhen I was in college, professors used to ask questions that are much harder than the question Allen Stern asks in this piece.  Permalink to this paragraph

The NY Times crossword puzzle is harder. Permalink to this paragraph

Geez, installing a new hard disk in a MacBook is harder, and as I've found out that's pretty easy. ;-> Permalink to this paragraph

Okay what is Twitter's business model?  Permalink to this paragraph

They give away access to the API only to find that add-on devs have a business model selling Twitter clients while Twitter itself is left sucking air.  Permalink to this paragraph

And this is some kind of problem? Permalink to this paragraph

We should all be so lucky. Permalink to this paragraph

Here's what you do if you're Twitter.  Permalink to this paragraph

Distribution. Permalink to this paragraph

How much you want to bet that Twitteriffic reaches a very small number of Twitter users.  Permalink to this paragraph

Twitter, of course, reaches every Twitter user. Permalink to this paragraph

So what could be easier than to offer to sell everyone a client that makes Twitter work a lot better?  Permalink to this paragraph

And of course Twitter would be entitled to some of that money. Permalink to this paragraph

Now, imagine that Twitter was really ambitious and they wanted to design a cell phone around Twitter. One that could make phone calls and play MP3s and do SMS but also had Twitter baked in.  Permalink to this paragraph

Okay, so you can't imagine Twitter getting into the hardware business or being a cell phone service provider. But what if one of those did a deal with Twitter, or even bought Twitter? Then you'd be paying a monthly service fee to use Twitter, and might have chosen TMobile or Sprint over Verizon or AT&T because they have Twitter and the other guys have Microsoft's ripoff of Twitter. Or Google's. I think there's a premium for being the original guy, if you play it right (I never do, but Evan Williams does this pretty well.) Permalink to this paragraph

Anyway, there are lots of ways for Twitter to make money once there are enough users. And right now their business is to grow and their first priority is to stabilize their service. This isn't based on inside knowledge, but comes from reading the tea leaves and applying common sense.  Permalink to this paragraph


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A picture named dave.jpgDave Winer, 53, pioneered the development of weblogs, syndication (RSS), podcasting, outlining, and web content management software; former contributing editor at Wired Magazine, research fellow at Harvard Law School, entrepreneur, and investor in web media companies. A native New Yorker, he received a Master's in Computer Science from the University of Wisconsin, a Bachelor's in Mathematics from Tulane University and currently lives in Berkeley, California.

"The protoblogger." - NY Times.

"The father of modern-day content distribution." - PC World.

One of BusinessWeek's 25 Most Influential People on the Web.

"Helped popularize blogging, podcasting and RSS." - Time.

"The father of blogging and RSS." - BBC.

"RSS was born in 1997 out of the confluence of Dave Winer's 'Really Simple Syndication' technology, used to push out blog updates, and Netscape's 'Rich Site Summary', which allowed users to create custom Netscape home pages with regularly updated data flows." - Tim O'Reilly.

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