Jeffrey Mann

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Jeffrey Mann
Research VP
14 years at Gartner
26 years IT industry

Jeffrey Mann is a research vice president for collaboration and social software at Gartner Research. Mr. Mann focuses on social software, team workspaces, the collaboration market and knowledge management. Read Full Bio

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The Social Media MacGuffin: A Volume-based Business Model for Twitter

by Jeffrey Mann  |  March 27, 2009  |  7 Comments

Twitter famously has no visible means of financial support, aside from the money it has raised from venture capital firms. A viable business model for Twitter has become the elusive MacGuffin sought by many observers of social media, like the statuette in the Maltese Falcon. Fairly vague comments from Twitter co-founder Biz Stone have ignited a fresh round of speculation that Twitter will start charging for some of its services to businesses.  I don’t claim any inside knowledge, but I’ve got some opinions based on research and the ways I’ve been using the service.
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I never really bought into the idea that Twitter would eventually have to start taking advertising or charge users directly. Charging individual users would certainly drive many people away, this hoax announcement notwithstanding. Unless done extremely carefully, so would advertising in the way most web sites do it. More people access Twitter using third party client software like Twhirl or Tweetdeck than go to the Twitter.com site anyway, so conventional advertising potential is limited.

Twitter must avoid doing anything that could reduce the number of people who use it or how often they tweet. Twitter’s real value is in the volume. Millions of people make around 6 million tweets per day, by one count, turning Twitter into a world-wide, real time twitching, tweeting sensing system. If you want to know what people are saying about your product, your candidate, your television show or your research report, then Twitter is the place to look. Companies would be willing to pay much more for better access to this content than a more functional client or some ads. There is much more value to be made by analyzing and feeding real time feedback. Twitter has already experimented with this model by working with the Current cable television channel to feed real time election Tweets during the US presidential election. They could easily take this much further. I think this is the kind of thing that Biz Stone is talking about when talks about opportunities in providing better services to businesses.

7 Comments »

Category: blogging social software startup Twitter     Tags: , , , ,

7 responses so far ↓

  • 1 andrew   March 31, 2009 at 12:03 pm

    I have struggled with how to monetise volume online within social networks for some years. I sold Yahoo! answers into Sainsbury’s in the UK, which was a global first for this product, and formed many other pitches and sales post this deal. I have been around as people have looked at P&G and Uniliver as digital cash cows and I have heard of some good uses of the social media space – Charities fund raising on Facebook, The police using Facebook to raise awareness of a certain crime – but have only ever really believed in DATA as the key driver of interest for brands. Not every brand or product is right for exposure in this space. Businesses need to be rejigged and aligned to think differently around social media and digital in general. Its not their space after all, is it? Data is the way forward I feel. How you get round people feeling uncomfortable with their data being used is the next struggle?

  • 2 Jeffrey Mann   March 31, 2009 at 4:13 pm

    So far, it looks like people are blithely unconcerned about what Twitter does with their content. Perhaps because each tweet is so short and feels so ephemeral, and because Twitter musings are usually public anyway they don’t feel the intense feelings that they do on sites like Facebook. The real test will come when Twitter does start analyzing or repackaging the data. They are certain to lose some users, but I think that most will not mind.

  • 3 Twitter’s Future   April 8, 2009 at 4:11 pm

    [...] ← The Social Media MacGuffin: A Volume-based Business Model for Twitter [...]

  • 4 Can Facebook Out-Twitter Twitter?   April 28, 2009 at 12:11 pm

    [...] site in order to make money by pushing advertising at them. For reasons discussed in an earlier post, I believe Twitter is concentrating on building volume and loyalty, with monetization to come [...]

  • 5 Of Microblogging, Twitter and Hype Cycles   August 19, 2009 at 12:43 pm

    [...] Twitter backlash has certainly begun, and many are piling on enthusiastically. I am not one of them, but there are definite indications that microblogging will have a difficult time [...]

  • 6 Journalists ask the darndest things   October 22, 2009 at 6:05 pm

    [...] from using it, and I think that is very clever. I talked about Twitter’s business model on this blog [...]

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