Is Twitter really a new form of communication that is taking the Web by storm? According to Twitter’s own analysis, yes it is. But the trickiest thing about Twitter is actually explaining what it is to the general public, and why it’s important.
Twitter is a type of instant blog service, where members post tiny micro blogs about their daily life, what they’re up to, where they’re going, and the general minutia of daily life. But this explanation doesn’t actually do Twitter justice. The service is now being used by people all over the world to keep friends, family and others updated on a variety of events happening in their area.
For example, the recent earthquake in Southern California was first reported, not by the traditional news outlets, or even by bloggers, but from instant twitter messages. Twitter’s big advantage over regular blogging is its speed — users can post breaking news and have it online (and potentially in front of millions of eyeballs) in a matter of seconds. The service is so fast and convenient that even political campaigns are using it very effectively to keep loyal followers up to date about day to day happenings out on the campaign trail.
But even though Twitter is garnering a global following to rival MySpace or Facebook, the company has yet to turn a profit. In fact, Twitter is following the “old school” philosophy for making money online: build the service first, and the dollars will eventually follow. The question is, how long can Twitter continue to build its global empire without a meaningful plan for monetizing the site?
In fact, Twitter’s creators have yet to even reveal a potential monetization strategy for the site, focusing in stead to focus on building their brand name, and attracting more users.
But in fairness to Twitter, they’re not the only Web 2.0 company to have trouble turning massive amounts of web traffic into a profitable business model. Google has admitted that they haven’t been able to adequately monetize the enormous traffic on YouTube. Facebook and MySpace are two other Web 2.0 Giants that are dealing with the same issue — neither has hit upon an efficient means of profiting from their global popularity.
Twitter has so far resisted the urge to use standard Web advertising models to monetize their site. The company admits that they make some revenue from users who update their Twitter pages via SMS text messages, though they won’t reveal how profitable this revenue stream is to their overall business.
But with more than 2 million users per month, Twitter is now facing increasing pressure to come up with a sound business plan for monetizing their Web traffic. Whatever they eventually try, you can be sure YouTube, Facebook and MySpace will be paying very close attention.
