How does Twitter make money?
Twitter has more than 50 million users but no way of generating revenue. There are no ads, no fees, nothing; which is a bit surprising for one of the fastest growing services this year. They have $55 million in venture capital and beyond that… nothing. So how are they going to pay their bills?
Twitter isn’t the only popular site with no income. Google, Inc bought YouTube for $1.76 billion and has yet to see any profits.
Even though Twitter isn’t yet making any money the company, NeXt Up Research estimates that Twitter is worth between $441 million and $589 million dollars. To put this in perspective, Facebook is worth upwards of $5 billion.
Twitter has big plans
According to DigiDaily, “Twitter claims that it has plans to generate $140 million in revenue this year.” They are in the first phase of offering premium, paid accounts. Of course, the basic Twitter service works just fine and it’s free. But major companies might want to pay for a premium account—especially if it gives them valuable information about their users. It will offer premium services like detailed analytics and “certified accounts” (accounts that certify they are owned by the ‘real’ business or person). They are considering building business-oriented application programming interfaces (APIs) to add a business layer to the company.
The basic idea is to build a set of features that people are willing to pay for, at least willing to pay something.
There are currently third party developers who make money off Twitter. Companies which help brands manage their customers and followers. Will Twitter be able to coexist with these third party developers, or will it simply push them out of business?
Many people feel that selling advertising will quickly alienate users, but others are so addicted to Tweeting that they might be willing to pay to continue using Twitter.
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What do you think? Would you pay to continue using Twitter?