Twitter: No plan for making money!
In a recent article about Twitter, the company admits that they don't have a plan for making money. The founder "wants the flocks of Twitterers to grow before trying out new business models." Hopefully he has enough cash to figure this out!
This approach is very similar to dot-com era new media models and what social networking sites like Facebook and MySpace are doing. Here's how it works:
- Build an audience with new content or functionality
- Get the audience to grow virally, by users spreading the service to each other.
- Sell to a bigger company as soon as you can — while your user base is still growing rapidly, you have plenty of cash, and you haven't yet had to prove that you can monetize the audience.
- If you must figure out how to monetize the audience, your options are:
- A. Sell advertising that is likely to be low response, since it takes users away from their activity.
- B. Sell fee-based premium services that users pay for.
- C. Convince the cell phone companies that you create revenue for them, so you should get a piece of their revenue.
- D. I don't know what D is.
- E. Go back to step 3. Sell to a bigger company as soon as you can.
