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Is Twitter F’ed?
The question of business model timing seems to come up weekly with regards to some startup. As Twitter usage has grown, have they f’ed themselves out of a real, sustainable business model? And has Pownce done something right by launching with a business model? Personally I prefer that a startup come out of the gate with a business model — perhaps it’s the accountant in me.
This reminds me of a commercial for UPS where the geeks turned on the ecommerce application and at first one order came in at a time. Then all of a sudden, they received 1,000,000 orders and had no way to box or ship them.
As Twitter usage has continued to grow, when will they need to start to monetize the service? When will Fred Wilson and Union Square come a knocking (they provided a round of funding in 2007)? At that point, Fred noted that they had no idea what the business model was or would be.
In November, I wrote about Twitterific making money while Twitter hasn’t made a dime. Twitterific charges $15 for their software.
Most of the heavy Twitter users use the service via the API and "offsite". I actually use the Web site and refresh the page every few minutes while I am at home. How can they monetize the API usage? If a Twitter user already paid $15 for a piece of software, would they then be willing to pay Twitter for their account? It’s like paying for mIRC and then having to pay for the use of IRC itself.
Pownce launched with a basic business model — charging for premium messages and injecting them into a user’s stream. I like their idea.
What business models do you see Twitter employing and when? Will an advertising-based model make the Twitter hardcore users leave? Would you pay for Twitter access? Leave your thoughts and I will post the ideas later this week along with my business model ideas.