Twitter's Monetization Conundrum

Twitter's traction and growth has been outstanding to say the least. The amount of information and people you can connect with shows how important this service is. From tracking your brand, your favorite topic or fellow users, Twitter has a use for all. We even see users divide into teams for an ad hoc rock/paper/scissors match! This is all great, Twitter fills a need and we have embraced it.

Sooner or later, the conversation shifts from, "will people use this" to "hey, we've gotta make some money here." After all, servers and staff aren't free. Monetizing Twitter is especially interesting because of its size and structure. One can assume, when there is user adoption (growth), revenue should follow. Twitter's structure represents a unique opportunity, which is fun to try to solve. How can you monetize a free product when a large portion of the users never interact with the product itself? If you use a mobile device or a Twitter client, chances are you haven't visited Twitter.com in a while.

Before I lay out some monetization ideas I think would work, it's important to discuss what won't. First and foremost, Twitter needs to remain free (for the users). If Twitter charged, you'd see many users, including myself, stop using and fall off completely. Once some users stop Twittering, the service, as a whole, is less valuable (for those who remain), which fuels the fall off. Also, a rival would quickly replace Twitter. The first restraint on monetization options: Twitter needs to remain free.

The next restraint, which is more subjective, is interference. Twitter can only interfere or disrupt their users' experiences to a point, after that, it becomes too annoying. For example, Twitter wouldn't be able to run an ad in between each tweat. This level of interference is a deal breaker for many, they would quit, thus fueling the fall off (see the previous paragraph.) The second restraint on monetization options: low interference.

Any monetization idea that keeps Twitter free and rarely disrupts the users' experience, is worth discussing. Here are my three ideas:

Ads on Twitter.com

Twitter could obviously run ads on their users' pages. This would generate some money while keeping the service free and interference low. This option is the easy way out.

Monetize Bot Usage

I see Twitter bots becoming more and more useful. For example, you can ask a Twitter bot for a stock quote. This bot could be sponsored, you send a tweat to the bot and when you receive your answer it could look like this "this quote is brought to you by Bloomberg.com - GOOG $450.30." The interaction between a person and a bot is different than the interaction between people. If you ask for information from a bot, you can get it, in a branded fashion. I believe this an acceptable amount of interference.

Keywords in the Tweets

My best and most controversial idea is keyword links. Twitter should allow a person or company to purchase a keyword, say "Apple." Whenever someone's tweat contains the phrase "Apple", that text is converted to a link back to Apple.com or elsewhere. This type of monetization keeps Twitter free and is non-intrusive.

There are many issues that need to be addressed before this idea could work. For starters, what happens if someone's tweat is negative? Say, "my crappy Apple computer just died." When the tweat is negative, should the keyword still be a link? A simple stop-word list could prevent this. If a tweat contains "x, y or z" then the keyword wouldn't be converted into a link. Stop-word lists could even be handled for each campaign (each company could use their own), some companies might like the link even if the tweat is negative.

As keywords in our Tweats become links for others, the question of ownership and content come into play. Do tweats count as content and if so, how can we be compensated? An opt-in rev share program could mitigate this issue. If your tweats contain a keyword, then you can opt-in to share the revenue generated. Personally, I wouldn't care if Twitter made money off of my tweats, but I can see where others would. They should have the option to share the revenue created from their tweats. Keywords in tweats would be based on a cost per click (CPC) model. There would also need to be some way to monitor clicks, to prevent fraud.

Creating keyword links inside our tweats is a unique idea, but Twitter is a unique service. I provide these ideas to add to the rich discussion surrounding Twitter and by no means feel that I've solved Twitter's monetization need. However, for any form of monetization to work, it needs to be minimally interruptive and Twitter needs to remain free. Any idea that meets these two criteria is worth discussing.

Editor's note: Check out our other Twitter monetization articles including whether Twitter is F'ed and could Twitter replace opt-in email campaigns?

This article was provided by Gregory Schnese. Gregory is a co-founder of SoUrban.net, an East Village blog about music, tech and fashion, and is the Web Producer at beYOU.tv, a fitness and wellness video community.