Two articles that really got my attention:
- Time's How Twitter Will Change the Way We Live
- The Economist's Tweeting all the way to the Bank
Both articles where really impressive and very insightful, but by the end of the day I came up with one question, how in the world are they paying for all those BILLION messages? How come companies such as Facebook or Twitter who have over 400 - 500 million users aren't profitable? Everyone is saying that they are waiting for an IPO, but I'm not sure if that's going to happen any time soon. I mean, I doubt that anyone will be OK by getting an ad on their phone.
Time's provided a great example on how Twitter is changing the way we established conversations:
Injecting Twitter into that conversation fundamentally changed the rules of engagement. It added a second layer of discussion and brought a wider audience into what would have been a private exchange. And it gave the event an afterlife on the Web. Yes, it was built entirely out of 140-character messages, but the sum total of those tweets added up to something truly substantive, like a suspension bridge made of pebbles.
Understood, but wait...someone is paying for all these standard rate messages. You see, I'm in the business of monetizing from these type of messages. I provide what people called Premium Short Messages (PSMS). Indeed, the market that controls all that downloadable content such as ringtones, wallpaper, subscriptions, etc has paid my bill. I don't hate Twitter, is a matter of fact I think is the future, just like I think the "Free" business model that Chris Anderson talked in his book is the 21st century model. However, it seems crazy to me to have such a financial hemorrhaging (the cost of short-codes, and standard rate messages is quiet high).
The Economist's article caught my attention on the amount of money that the founders have gained,
... a hacker recently leaked documents after gaining access to the private e-mail accounts of a Twitter employee and the wife of one of its founders, the blogosphere was abuzz. The haul included a spreadsheet showing revenues reaching $140m by the end of 2010, up from $4.4m this year.
Later it mentioned about the most-likely case scenario for Twitter:
Embedding advertisements in “tweets”, short text messages that can be up to 140 characters long, is unlikely to appeal to users. A better bet would be for the firm to charge corporate users for premium services. For example, it could pocket a fee from businesses for verifying their Twitter accounts, so that users following their postings would know the firms’ tweets are genuine. It could also develop a statistical toolkit that measures the effectiveness of tweets in generating sales.
